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What happens to the tax liability after the IRS lien expires?

Campbell, CA |
Filed under: Tax lien Debt Tax law

I am in an uncollectable status with the IRS but have a lien against me. If my situation doesn't change, as interest and penalties continue to grow, after the lien expires, does the liability drop off too?

Attorney Answers 3

Posted

If your account remains in Currently Not Collectible status until the statute of limitations (a.k.a., Collection Statute Expiration Date) expires then the government will no longer be able to collect the debt. The CSED is 10 years from the date of assessment, subject to some exceptions.

This response should not be considered legal advice. No attorney-client relationship is formed by this response, which reflects only the opinion of the author. The response should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question and could change if additional facts were made available.

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Posted

You have the process backwards. While you are in CNC status, the 10 year period for collection continues to run. Once the 10 years passes, the amount is no longer owed, so the lien is removed as the IRS no longer has an interest to protect.

Christopher Larson
Insight Law

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2 comments

Asker

Posted

What do you mean by "the IRS no longer has an interest to protect"?

Christopher Michael Larson

Christopher Michael Larson

Posted

The lien only exists because you owe them money. The lien is intended to pay them if you sell any assets. http://www.insightlawfirm.com/

Posted

I agree with Attorney Larson. One note: You may have to contact IRS and request a Release of Lien. Otherwise, it may take years to actually see proof of the liability released.

Attorney J Anton Collins is a featured Criminal Tax Defense Attorney on Avvo. You may contact Attorney Collins directly at jcollins@jonescollins.com, or 866-340-5055, for more specific answers. This forum is merely for open, public discussion. Discussions in this open, online forum are not intended to create an attorney-client relationship. IRS CIRCULAR 230 DISCLOSURE NOTICE: IRS Circular 230 regulates written communications about federal tax matters between tax advisors and their clients. To the extent the preceding correspondence and/or any attachment is a written tax advice communication, it is not a full “covered opinion”. Accordingly, this advice is not intended and cannot be used for the purpose of avoiding penalties that may be imposed by the IRS regarding the transaction or matters discussed herein. Each taxpayer should seek advice from an independent tax advisor with respect to any Federal tax issues, transactions or matters addressed, discussed or referenced herein based upon his, her or its particular circumstances.

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