How Long Does a Tax Lien Last in Texas?

If you do not pay the full amount of taxes owed when you file your federal tax return, the IRS will send a bill. If you neglect or refuse to pay the bill, a lien can be put on your property. A lien involves using the property of an individual or entity who owes a debt as collateral against a late tax payment. If the IRS places a lien against your property, you may be wondering, “How long does a tax lien last in Texas?”

Hire a Tax Lien Lawyer

The experienced attorneys at David Coffin PLLC can help you navigate the complexities of a tax lien. The firm’s sole focus is on helping clients resolve their tax issues with the IRS. Past clients can attest to the professional, effective, and compassionate service our Texas tax lien attorneys provide.

Tax Liens in Texas

Failing to pay a tax debt can result in a lien against your property. The lien will typically be in place until the assessed liability is paid. Generally, the IRS will have ten years to collect the payment after the assessment has been made.

IRS Tax Lien Process

In 2022, the IRS projected a tax gap of $606 billion, and most of that amount was the result of unpaid individual income taxes. If you have unpaid taxes, the IRS will send a Notice and Demand for Payment to you via mail. This document is a bill and an explanation of the amount owed.

If you do not pay the full amount owed by the due date, the IRS will file a Notice of Federal Tax Lien. The Notice of Federal Tax Lien is a public document intended to alert creditors that the federal government has a legal right to your property. Filing this claim alerts creditors that the government has a priority claim to assets.

The IRS will release the lien when the debt is paid in full, a bond is in place to cover the debt, the IRS has accepted an Offer in Compromise, and you have met the payment terms, or the collection period has expired.

The IRS will file a Certificate of Release of Federal Tax Lien indicating the debt has been cleared. This filing will happen within 30 days of the debt being satisfied or legally unenforceable.

You can make a request in writing to receive a copy of the Certificate of Release of Federal Tax Lien by contacting the Collection Advisory Group. In the Dallas-Fort Worth area, the agency is located at 1100 Commerce St, #121, Dallas, TX 75242.

What Can Happen if a Lien Isn’t Paid?

Not paying a lien against your property can result in serious legal and financial outcomes:

• In addition to the original cost of the taxes owed, fees and interest can start to accumulate on the debt. Sections 6621 and 6651 (a)(2) of the Internal Revenue Code allow for interest to compound daily up to 25% of the original amount owed.
• Lenders can find the lien in a search of public records, making it potentially difficult for you to secure a loan or acquire rental housing.
• You may have to pay higher interest rates if a lender considers you high-risk due to the lien, or you may be denied credit.
• The IRS can pursue other ways to collect on the unpaid debt, such as garnishing wages, freezing bank accounts, and taking possession of personal assets like your investment accounts or vehicles.
• If a substantial debt is owed, the IRS can foreclose on the property using a judicial foreclosure.
• If you decide to sell the property, the debt owed to the IRS will be deducted from the sale price before any funds are released to you.

Why Choose Our Firm?

The attorneys at David Coffin PLLC focus on helping their clients navigate and resolve tax issues with the IRS. David Coffin has over two decades of legal experience focusing on tax law and is a certified public accountant. The firm provides tax services to clients across the US, the state of Texas, and the Dallas-Fort Worth metro area.

FAQs

Knowledgeable Texas Tax Lien Attorney

Understanding the legal complexities and implications of a tax lien can be overwhelming. The experienced attorneys at David Coffin PLLC focus on resolving issues with the IRS and can provide insight into your circumstances. Contact the office to schedule a consultation and find out how our attorneys can help.