How to Get an IRS Lien Release After 10 Years

A federal tax lien is the government’s legal claim on a person’s property for an unpaid tax debt. This claim, managed by the Internal Revenue Service (IRS), attaches to all of a taxpayer’s assets, such as real estate and financial accounts. The lien secures the government’s interest and serves as a public notice to other creditors. This can complicate the sale or transfer of assets, but there are rules governing the lien’s duration and removal.

The Collection Statute Expiration Date

The IRS’s authority to collect an unpaid tax debt is limited by a 10-year statute of limitations, known as the Collection Statute Expiration Date (CSED). This period is established by the Internal Revenue Code. Once the CSED passes, the IRS loses its legal ability to enforce collection, and the underlying tax liability is extinguished.

The 10-year period begins on the date of assessment, which is when the IRS officially records the tax liability. This occurs shortly after a tax return is filed and processed. For instance, if the IRS assesses a tax on April 13, the collection period ends on April 13 of the tenth year. Each tax period has its own CSED, so older tax debts expire sooner than recent ones.

Events That Extend the Collection Period

Certain actions taken by a taxpayer can pause, or “toll,” the CSED clock, extending the time the IRS has to collect the debt beyond the original 10 years. Understanding these events is important for determining when a lien should be released. The most common tolling events are:

• Filing for bankruptcy, which pauses the CSED for the duration of the bankruptcy proceedings plus an additional six months.
• Submitting an Offer in Compromise (OIC), which pauses the clock while the OIC is pending with the IRS and for 30 days after a rejection.
• Requesting an installment agreement, which suspends the CSED clock while the request is being considered by the IRS and for 30 days after a rejection.
• Requesting a Collection Due Process (CDP) hearing, which suspends the CSED from the date the hearing is requested until the determination becomes final.
• Living outside of the United States for a continuous period of at least six months, which pauses the 10-year clock for the amount of time the taxpayer is abroad.

Verifying the Lien Release

The IRS is required to release a federal tax lien within 30 days after the CSED has passed. The official document that confirms this action is the Certificate of Release of Federal Tax Lien. Although this process should be automatic, a taxpayer should verify that it has occurred.

To confirm the lien’s status, a taxpayer should first determine the precise CSED for their account. This can be done by requesting a tax account transcript from the IRS. The transcript provides a detailed record of activity for a specific tax year, including the original assessment date needed to calculate the 10-year expiration. By adding ten years to the assessment date shown on the transcript and accounting for any tolling events, one can calculate the CSED.

Once the CSED is confirmed to have passed, the taxpayer should check public records to see if the Certificate of Release has been filed. If more than 30 days have gone by since the CSED and the lien has not been released, the taxpayer should contact the IRS directly. A call to the agency or a written request may be necessary to prompt the issuance and filing of the Certificate of Release. Having a copy of the tax account transcript is useful for these communications.

Removing the Lien from Public Records

Receiving the Certificate of Release of Federal Tax Lien is a major step, but it does not automatically remove the original lien notice from public records. The taxpayer must take proactive steps to ensure their property and credit records are cleared. The original Notice of Federal Tax Lien was likely filed with a local government agency, such as the county recorder’s office or clerk of court, where the taxpayer owns property. To clear the public record, the taxpayer must file the Certificate of Release with the same office.

There may be a small filing fee associated with recording the document. This step is important for anyone who plans to sell, refinance, or transfer property, as the original lien notice could otherwise cause delays or complications.

A federal tax lien can also negatively impact a person’s credit history. However, as of 2018, the three major credit reporting agencies—Equifax, Experian, and TransUnion—no longer include tax lien information on consumer credit reports. As a result, a released tax lien should not appear on or require removal from a standard credit report.