Whether you owe a few hundred dollars or hundreds of thousands, tax debt can be extremely stressful and have serious adverse effects on your personal and professional life, especially when it leads to a tax lien. Thankfully, there are many ways to reduce or even eliminate your tax debt entirely—one of which is to allow the statute of limitations on your tax liability to elapse.
In this blog, we’re going to discuss the statute of limitations on IRS and Maryland tax liens, as well as how you can eliminate these liens before these deadlines expire.
If you fail to pay your state or federal taxes, the government is within its rights to impose a legal claim against your property and financial assets. This is known as a tax lien. A tax lien makes it nearly impossible to sell your property and extremely difficult to make new purchases.
In order for the government to place a lien on your property, it must first assess your liability and then send a Notice and Demand for Payment. If you are unable to pay the amount in full or come to some sort of payment agreement, you will then receive a Notice of Lien.
If you can pay your tax debt, the IRS will release your lien within 30 days. If you’re unable to pay in full, you could be eligible for certain programs to minimize the effects of the lien:
Federal taxes have a collection statute expiration date (CSED) of 10 years following the tax assessment noting the liability, which is the date the IRS sends you your first bill for your tax debt. If you have not filed a return, then your statute of limitations does not begin until you do, so there’s no sense delaying the inevitable.
This period can extend beyond 10 years if the statute is suspended by bankruptcy or while you live outside the United States for six or more consecutive months. The collection statute can also be suspended while the IRS considers an Installment Agreement, Offer in Compromise, or Request for Spousal Relief. In rare instances, the IRS could seek to extend the 10-year statute of limitations by suing you in federal court, but they only do this in extreme circumstances and are not always successful.
Unfortunately, in Maryland, there is no statute of limitations on a tax debt or tax lien, which means you will have to achieve a zero balance to have your lien(s) removed. Thankfully, there are several proven strategies you can take to resolve your tax debt and regain control of your financial future.
Related Content: How to Avoid a Maryland State Tax Lien
You can’t sit back with your fingers crossed hoping the IRS tax collection statute of limitations expires. The government is notorious for its aggressive collection tactics, which will only increase once you begin nearing that 10-year CSED. Instead, you should consider one of these methods to resolve your tax debt and release your tax lien.
The methods above are effective but can be difficult to achieve, which is where a skilled and experienced tax attorney can make all the difference.
Related Content: How Does the IRS Decide What I Can Afford to Pay?
At S.H. Block Tax Services, we have decades of experience helping taxpayers in Maryland and throughout the U.S. eliminate or minimize the effects of their tax liens. Our firm focuses exclusively on tax law, so we know what it takes to get the job done and get you back on the right path.
Please call (410) 872-8376 or complete this brief form today to schedule your free consultation with one of our skilled tax attorneys.
The content provided here is for informational purposes only and should not be construed as legal advice on any subject.
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