When Are IRS Tax Liens Filed? How Can I Avoid Them? 3

When does the IRS file a lien?

For purposes of back due tax personal tax debts, the Internal Revenue Service typically files a lien in the following situations:

  1. You have a balance over $10,000 due and your account is placed into Currently Not Collectible Status.
  2. You have a balance of over $10,000 due, it has been past 30 days since you received a Final Notice of Intent to Levy and you or your representative have taken no actions to try and resolve the account.
  3. You owe $10,000 or more and set the balance up into a payment plan that does not fully pay the balance within 72 months.
  4. You have a balance over $50,000 and enter into a monthly payment plan.
  5. An Offer In Compromise is pending with the IRS on a balance due over $10,000. They usually do not file this while the offer is pending but I have seen them do it. They send you a letter on every offer that states they reserve the right to file a lien while the offer is pending.

NOTE: Prior to 2018, IRS tax liens against your property used to show up on your credit report. Since 2018, the IRS has changed its policy and no longer reports the lien to credit agencies. While a lien can still impact your eligibility for credit, it does not show up on your standard credit report (such as applications for car loans, tenancy, employment, etc.).

How long does a tax lien last?

At the minimum, an IRS tax lien lasts for 10 years. However, a tax lien can be extended beyond 10 years if…

  • An installment agreement is executed to pay the tax debt, which extends the statute of limitations
  • The taxpayer files an Offer in Compromise with the lien in effect
  • The IRS simply refiles the tax lien within 10 years time

Obviously, trying to wait out the tax lien is not the answer. Tax liens merely exist as a security interest mark on the lined property. As the negotiations between the taxpayer and the IRS ensue, the lien can be removed earlier if a settlement is reached. But every situation is different.

How to avoid an IRS tax lien?

Here are some easy ways to avoid IRS tax liens:

  1. For any amount due up to $50,000, enter into an IRS Fresh Start payment plan to pay off the debt in 72 months or less.
  2. For amounts over $50,000, pay it off or pay the balance below $50,000 before entering into a payment plan.
  3. If you have no way to pay and have no tax liens, consider filing an Offer In Compromise.

If you have a lot of other debt, you might want to look at Bankruptcy instead of an Offer In Compromise.

Not sure what to do and need help with your back due to tax debt? Fill out the contact form on our website here. or call us at (888) 515-4829. One of our expert tax attorneys will consult you for free for 15 minutes with no obligation.

This is not intended to be legal advice and is for information purposes only.

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