Massachusetts Agencies

Duration of Lien: Transition Period

Federal Tax and Tax Liens

Section 11317 of the Omnibus Budget Reconciliation Act of 1990 amended §6502 of the Internal Revenue Code by extending the lien period of federal tax liens to ten years with respect to those liens that were assessed before November 5, 1990, and had not expired by October 1, 1990, and permitting the refiling thereof to be made as late as thirty days after the expiration of said period.

Interestingly enough the IRS has stated on at least one occasion that the rule is otherwise and that the lien expires on the date stated in the notice for refiling regardless of the provisions of the statute. I am aware of a letter authored by an attorney and mailed to the then president of the Massachusetts Conveyancers' Association at the time, which says this:

With regards to the 1988 [federal] tax lien, wherein the 6 year statute of limitation had not "run" prior to the effective date of the amendment changing the limitation period to ten years, according to [the IRS agent], the IRS takes the position that the language in the notice of lien which states, "With respect to each assessment listed below, unless notice of lien is filed by the date given in column (e) this notice shall, on the day following such date, operate as a Certificate of Release as defined [in] IRC 6325(a)" is dispositive.

I presume that all Federal Lien notices contain this language. Thus, it would appear, that the IRS is taking the position that for all practical purposes, the extension of the lien from 6 years to 10 years does not impact Federal Tax Liens recorded prior to the amendment of the tax code, even if the six year statute of limitations had not yet run at the time the 1990 amendment became effective.

Even though this interpretation is different from what I had read in various legal publications, it goes without saying that since this interpretation is helpful to Conveyancers, and since it is an interpretation put forth by all of the IRS agents that I dealt with, it was not something I particularly wanted to argue about.

I don't buy what the agent told the attorney. I think liens that had not expired by November 5, 1990 were automatically extended.

Before this law was passed federal tax liens expired in six years (unless timely refiled.)