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  • Robert Nath


Updated: Mar 14, 2022

What is a federal tax lien?

A federal tax “lien” is simply a legal charge on your property, to secure the payment of a tax debt. It’s like a mortgage, or lien on your car.

But you sign on for those mortgages and car liens voluntarily. There is nothing voluntary about the federal tax lien! If you don’t pay a tax, it arises automatically, by law, simply by your failing to pay. At that point it is “secret,” that is, only you and the IRS know about it. When the IRS files a notice of tax lien, that is public record, that is, notice to the world that you owe the tax.

I see on the lien form that the lien can be “refiled.” Can the IRS extend the lien by refiling?

Yes, BUT ONLY if the government (Department of Justice) files a federal court lawsuit BEFORE the original lien period expires (normally 10 years from the date of assessment of the taxes). Simply re-filing the notice of lien when the 10 years expires does NOT extend the lien period, and the IRS does not do this absent the above-noted lawsuit.

To what does the federal tax lien attach?

By law it attaches to “all property or rights to property” that you own or in which you have a legal interest or claim. This language means just what it says: everything, wherever located. But just because the lien attaches to your property does not mean you lose the property. Other liens, such as mortgages, can and usually do come ahead of the IRS lien because they were filed before the IRS lien was filed. A shorthand expression for this is: “First in time is first in right.” The law relating to the federal tax lien is complex, so consult an advisor to determine your rights on this issue.

How can I deal with the lien if has already been filed?

The law provides many ways to manage the federal tax lien. The lien can be paid in full. If you can’t do this, and want to sell property, then you can apply to have the lien subordinated, or you can ask the IRS to “discharge” the property from the lien. You can file an “offer in compromise” for your taxes; if accepted and paid, the IRS will release the lien. The law also allows other, more cumbersome, ways of dealing with the tax lien.

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