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Tax Lien | How Long Do They Last | Florida

Updated: 3 days ago

FLAT FEE TAX RELIEF


Tax liens are just one of the many enforcement actions the IRS has at their disposal. Do you really know that they do not last forever? Read this article to find out everything you need to know. Our team has broken it down in sections.


What is a Tax Lien (Federal Tax Lien)?

What's the difference between a tax lien and an IRS levy?




1. Can I Postpone a Tax Lien?

2. How Long Does a Tax Lien Last?

3. How to Remove a Tax Lien

4. File an appeal

5. Pay your back taxes

6. Discharge of property

7. Subordination

8. Withdrawal



Tax Relief Programs - IRS Fresh Start Program

a. Higher tax lien thresholds

b. Tax penalty relief

c. Expansion of the IRS’ Offer in Compromise program

d. Why is the IRS making these changes?



What is an Offer in Compromise?

Partial payment tax agreement


Tax Resolution Services for Debt Relief





What, Exactly, Is A Tax Lien?

When your tax bill goes unpaid, the government (IRS) may file a legal claim against your property; this includes real estate, personal property, and financial assets. This claim is called a tax lien and is just one of the enforcement actions that the IRS has at its disposal.

When your delinquent tax account is subject to a federal tax lien, you may or may not receive official notice from the IRS. The IRS must be mailed out. The IRS has no obligation to ensure receipt of said notice. A tax lien notice will come in the form of a document titled Notice of Federal Tax Lien and will contain several key pieces of information, such as:

a. The type of tax debt you owe

b. The years in which the debt in question were assessed

c. The date when the balance was assessed

d. The amount of the tax debt — not including penalties and interest — that have been assessed

e. The last date on which the tax lien can be refiled

f. For verification purposes, the last four digits of your Social Security number When the IRS issues a tax lien, this document enters the public record (most likely the county recorder's office) and gives the federal government claim to aa of your assets and future wages. The tax lien is attached to all your property — this includes any bank and investment accounts; any vehicles, real estate, or valuable items you own; and, if you own a business, accounts receivable.

Should you attempt to sell any property that is under an IRS tax lien, the sale proceeds will automatically go to the government first. After your tax debt is settled, the government will forward the remaining funds to you. If the full debt isn’t covered by the sale of the property, the tax lien will remain on your other assets.

In most cases, a federal tax lien is not filed for tax debts under $10,000. If you are worried about being slapped with a lien but are not able to pay the full amount you owe, try paying your balance down to below $10,000, if possible.

What is the difference between a tax lien and an IRS levy?

While a tax lien is a legal order to seize your property to secure payment of your tax debt, an IRS levy actually takes the property to satisfy the tax debt; a levy is a legal seizure of your property to satisfy a tax debt. Property is real property, your paycheck and/or you bank account.

While tax liens and IRS levies are two different things, federal tax liens lead can lead to levies. It is important to note that in order to impose a tax levy, the IRS does not need a warrant or a court judgement, as they are a self-sustaining governmental organization. Can a tax lien be put off?

If you take steps to resolve your tax debt, such as submitting an Offer in Compromise to settle your account for less than you owe, appealing an IRS decision, or enrolling in an installment agreement, the expiration date on your debt is extended. If this occurs, the IRS can refile your tax lien within 30 days of the original expiration date and it will last until the new expiration date. How Long Does a Federal Tax Lien Last?         


Federal tax liens are administered by the IRS. IRS tax liens self-release after their statute of limitations expires; this happens automatically after ten years from the date of assessment.

You could believe that all you have to do is wait ten years for the federal tax lien statute of limitations to expire and you’re in the clear, right? Not so fast Skippy. There’s a reason so few taxpayers opt to wait out the statute of limitations. If you purchase any property or earn any money through income during that 10-year period, the IRS can and will seize it to pay off the outstanding tax debt. An active tax lien can destroy your credit, making it an immense challenge to get a mortgage or any other type of loan.  How to Remove a Tax Lien

1. File an Appeal

When it comes to the collections process, the law gives taxpayers many rights and protections. One such protection is the entitlement to notices from the IRS and the right to sufficient time to resolve tax problems. Another such right taxpayers have is the right to appeal collection actions by the IRS.

When you first receive a notice of a tax lien from the IRS, go ahead and give them a call. While this won’t always be a success, it has the potential to end your headache quickly and easily should it be successful.

The appeals process doesn’t always work, but it is always worth a shot. And if you have a compelling reason and if removing the lien can demonstrably improve the IRS’ chances of receiving the outstanding amount, then appealing the lien may be the quickest and easiest way to get it removed.


2. Pay Your Back Tax Debt

It's easier said than done, but, if your initial appeals fail, the best way to remove a tax lien is to pay your back taxes as soon as possible; the longer you owe unpaid taxes, the bigger your tax bill will become.

If you can’t afford to pay in full, you may qualify for a payment plan with the Internal Revenue Service. Simply put, an installment agreement with the IRS to pay the taxes you owe within an extended but defined timeframe. There are two kinds of payment plans: short-term and long-term.

A short-term payment plan, or Full Payment Agreement, is a 120-day extension to pay in full. There are no additional fees for a full payment Agreement, but interest and applicable penalties still accrue until your liability is paid. However, if you are experiencing financial hardship, full payment agreements can still put a strain on your bank account — and your peace of mind.

If a Full Payment Agreement is not financially attainable, you may be eligible for a Long-Term Payment Plan, which entails an Installment Agreement. An Installment Agreement allows you to pay your taxes over an extended period of time while avoiding collection actions from the IRS such as liens, garnishments, and levies.

When utilizing an Installment Agreement to pay your taxes, you will still owe interest and late penalties. However, Installation Agreements allow you to break up the amount you owe into much more affordable chunks.

Additionally, there are a few options for reducing the impact of a lien that the IRS will agree to if it is in the best interest of both the government and the taxpayer:

3. Discharge of property

A Discharge of Property removes the lien from specific property, such as a home. This allows the taxpayer to, for example, refinance their mortgage to help pay back their tax debt.

4. Subordination

While a Subordination does not remove the lien, it allows other creditors to move ahead of the IRS. This allows the taxpayer to have an easier time getting a loan or mortgage. The IRS will do a subordination if the proceeds from the sale or re-fi results in paying the tax debt.

5. Withdrawal

A withdrawal removes the public Notice of Federal Tax Lien and assures that the IRS is not competing with other creditors for your property. However, you are still liable for the amount due.

As part of the IRS’ revamped Fresh Start initiative, are two options that withdraw your Notice of Federal Tax Lien after the lien’s release. In order to be eligible:

a. Your tax liability has been satisfied and your lien has been released; and also:

b. You are in compliance for the past three years in filing for all individual returns, business returns, and information returns

c. You are current on your estimated tax payments and federal tax deposits, as applicable

Another relief option may allow withdrawal of your Notice of Federal Tax Lien if you have entered in or converted your regular installment agreement to a Direct Debit installment agreement. In order to be eligible:

a. You are a qualifying taxpayer (individuals, businesses with income tax liability only, and out-of-business entity with any type of tax debt)

b. You owe $25,000 or less (If you owe more than $25,000, you may pay down the balance to $25,000 prior to requesting withdrawal of the Notice of Federal Tax Lien)

c. Your Direct Debit Installment Agreement must fully pay the amount you owe within 60 months or before the Collection Statute expires — whichever comes first

You are in full compliance with other filing and payment requirements

d. You have made three consecutive direct debit payments

You have not defaulted on your current or any previous Direct Debit Installment agreement. 


IRS Fresh Start Program

If you are financially struggling, the IRS Fresh Start Initiative for individual taxpayers and small businesses might be able to provide the help you need. Since 2011, the Fresh Start Program has helped thousands of taxpayers pay their outstanding amounts. The IRS has expanded the program by adopting more flexible terms for Offer in Compromise (OIC) agreements. This settlement expansion will allow some of the most financially distressed taxpayers to clear up their tax problems much more quickly than before.

Here are a few of the changes:

a. Higher Tax Lien Thresholds - Generally, the IRS will not issue a tax lien on a taxpayer’s home or other assets unless the total debt owed is $25,000 or more. Before the change, the threshold was set at $5,000 or more. Since the change, taxpayers may request the IRS to remove the lien from their property if the amount of tax due is $25,000 or less and they have a Direct Debit Installment Agreement (DDIA) in place. To request the withdrawal, the taxpayer must also agree to pay the entire amount due within sixty months or before the Collection Statute expires, whichever is earlier. Once a taxpayer meets all the requirements of a direct debit payment plan, the taxpayer may complete and submit to the IRS Form 12277, Application for Withdrawal Notice of Federal Tax Lien.

b. Tax Penalty Relief - The IRS Fresh Start program opened the door to more tax relief options from tax penalties. IRS penalties can sometimes be staggering and can make some tax debt seem impossible to pay. Having more opportunities for taxpayers to reduce or eliminate the penalties accrued on tax due may save taxpayers thousands of dollars.

c. Expansion of the IRS’s Offer in Compromise Program - Generally, the IRS will accept an OIC when the amount offered represents the most the IRS can expect to collect within the Statute of Limitations. With the Fresh Start Initiative, the IRS streamlined the complicated process of submitting a settlement offer, making it easier for taxpayers to rid themselves of s onerous tax debt.



What is an Offer in Compromise? 

An Offer in Compromise, or OIC, is a settlement agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. When entering an OIC, there are three options: a Lump Sum Payment, a Short-Term Periodic Payment, and a Deferred Periodic Payment.

Generally speaking, the IRS will not accept an OIC if they believe the liability can be paid in full as a lump sum or through a payment agreement. The IRS looks at the taxpayer’s income and assets to make a determination of the taxpayer’s reasonable collection potential. You do not need to be destitute to have a successful Offer in Compromise. What we need to show the IRS is that you have very little money leftover after paying every day expenses.


THE IRS HAS TWO (2) GOALS. ONE IS TO COLLECT MONEY. THE SECOND (2nd) IS TO CLOSE A FILE. AN OFFER IN COMPROMISE ACCOMPLISHES BOTH GOALS. The tax professionals at Flat Fee Tax Relief have been providing valuable IRS tax debt help at a very affordable fee for more than a decade. Our Tax Attorneys have a 96% Offer in Compromise success rate.


Our tax pros are strategically located in Clearwater, Florida, and San Diego, California. We provide tax relief programs from coast to coast. We start at 8 A.M. Eastern and finish at 6 P.M. Pacific time. This gives us a tremendous advantage when stopping an IRS levy is of paramount importance.

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