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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I have a IRS tax lien for 53,000 dollars from a restaurat bus

Customer Question

I have a IRS tax lien for 53,000 dollars from a restaurat bus from 2000 to 2006.I would like to get on with my life and remove this with some kind of payment maybe a payment plan on the original amountwho knows but 53,000 and keep adding penalties is crazy,they said with my childsupport and salary I can't pay now what are my options to try and settle this
Submitted: 6 years ago.
Category: Tax
Expert:  Merlo replied 6 years ago.

Hello cpc,


You basically have a couple of options open to you.


The first is to try submitting an Offer in Compromise (OIC) to try and settle the tax debt for a lower amount than what you actually owe. An OIC basically involves submitting paperwork with complete financial disclosure of all your current assets and income. The IRS will also take in to consideration your future years' earnings potential. If after reviewing the situation it seems unlikely to them that you would ever be able to pay off this debt in full in the allowed 10 years that they have to collect the debt, then they may agree to settle the debt for a lower amount. The paper work involved in submitting an OIC is extensive and it is advisable to use the services of a tax consultant or Enrolled Agent who is familiar with this process.


Your other option is to apply for an installment payment plan so that you could make regular payments on your account. With a payment plan, interest would continue to accrue on the outstanding balance, but as long as you stayed current with your payments it would keep the IRS from placing any liens or levies on your assets.


Below are links to sections of the IRS website with more information on both the OIC and the payment plans.,,id=104593,00.html,,id=108347,00.html


If this was helpful please press the Accept button.


Thank you cpc



Customer: replied 6 years ago.
Are you saying that if I go 10 years as uncollectable than what happens to the lien and the money I owe is it forgiven?
Customer: replied 6 years ago.
and can they extend that 10 year collection period,I have already done 4
Expert:  Merlo replied 6 years ago.

Hello again cpc,


The IRS has a 10 year statute of limitations in which time they can continue to collect a tax debt. The 10 year statute starts on the day that the tax was finally assessed. So as an example, if you filed taxes for the year 2003 and an audit was conducted 2 years later in 2005 and they finally assessed additional taxes for that year in 2006, then 2006 is when the statute starts. It does not go back to the 2003 date.


Once 10 years has passed the IRS can no longer legally pursue collection of that particular tax debt and the debt is basically written off.


If this was helpful please press the Accept button. Positive feedback is also appreciated.


Thank you cpc



Merlo and 2 other Tax Specialists are ready to help you
Customer: replied 6 years ago.
what about the tax lien that is filed against me against me
Customer: replied 6 years ago.
you said that after 10 years they cannot legally pursue the tax money than you said they can extend it which is it and what happens to the filed lien?
Expert:  Merlo replied 6 years ago.

Hello again cpc,


After 10 years has passed, the tax lien expires. Tax liens are generally self releasing after 10 years.


I am not sure what you are referring to when you say that "you said they can extend it"?

Where did I say that?


The only time that the IRS can extend the 10 year statute is if the taxpayer is willing to extend it, which is not likely to happen in most cases.



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