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Do Federal tax liens expire after some period of time? I would guess they wouldn't extend past the 10 year collection statute, but maybe they do.

There are two separate issues, the statutory lien and the public-record notice of lien.

The statutory lien arises at the date of assessment, attaches to all the taxpayer's property present and future-acquired, and is good for 10 years unless extended (IRC 6321-22 and 6502).

The notice of lien establishes priority against certain third parties with an interest in the taxpayer's property (IRC 6323). It's valid as of the date of recording until it's released. If the statutory lien is extended beyond the original 10 years the notice must be "refiled" to maintain its priority. The deadline for refiling is 30 days after the expiration of the original 10-year statutory lien. A refiling extends the notice for another 10 years.

Since sometime in the 80's the notices are "self-releasing." Even if the statutory lien is extended the notice is released as of the refiling deadline if it hasn't been refiled. To re-establish priority against the applicable third parties a new notice must be filed.

In my day the legal opinion was that a failure to refile extinguishes the underlying statutory lien, which must be revived with a revocation of release, establishing a new attachment date. I noticed that the IRS has recently revised the 6323 regs, which hadn't been revised since the Federal Tax Lien Act of 1966, but I haven't had a chance to look at them yet. I got the feeling from the summary that I read that they have addressed the failure to refile.

Rule Your Retirement Home Fool
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