How Long Does a Michigan Tax Lien Last?

Owing back taxes is stressful. If you’ve received a Notice of Michigan State Tax Lien, you probably have questions: “How long does a Michigan tax lien last?” What happens if I don’t pay my unpaid Michigan taxes?” “Can the government take my property?” 

This post addresses common questions about Michigan tax liens, including how long they last, how long you have to pay, and the potential consequences if you don’t. 

What Is a Lien?

Liens give creditors an interest in your property to guarantee you pay what you owe. If you fail to pay off your debts, your creditors can seize the assets or claim a portion of the proceeds from a sale. 

Some liens are voluntary. For example, when you take out a home loan, you give the lender interest in your property until you pay off the mortgage.

Tax liens are involuntary. When you owe unpaid taxes to the Michigan Department of Treasury, the state can create a lien on your property. 

When Can the Government Attach a Lien?

Before answering “How long does a Michigan tax lien last?” it’s important to understand when the state can attach a tax lien. The Department of Treasury will only file a tax lien notice if all of the following are true:

1. The state has assessed a tax liability.
2. The state has sent you a Bill for Taxes Due (Intent to Assess) and/or a Final Bill for Taxes Due (Final Assessment) telling you how much you owe.
3. You have not paid off your tax debts within 35 days (or 90 days for individual taxpayers) of the Final Assessment date.

How Long Does a Michigan Tax Lien Stay on My Property?

Once the Department of Treasury creates a lien, it lasts seven years. The state can extend it for another seven years by refiling it within six months before the expiration date of the original lien. 

Michigan can attach a lien on real or personal property. That means the government may have a claim on your business, home, vehicle, and other assets (often with priority over other creditors). 

What Happens If I Don’t Pay My Tax Debts in Michigan?

Taxpayers are responsible for filing tax returns on time and with the correct payments. Failure to pay any tax due has multiple serious potential consequences, including the following:

• Lien attachments: Liens can prevent you from selling your property and even allow the government to foreclose on your home.
• Credit troubles: A lien can also hurt your credit, making it difficult to take out a loan or qualify for a credit card. Your account may also go to a collection agency. 
• Tax warrants: A tax warrant enables the state to close your business and/or seize your personal property, including business equipment, vehicles, assets, and inventory.
• Various levies: The Department of Treasury can require your employer to withhold a certain amount from your paycheck. The state can also levy against your bank accounts, rental income, or insurance proceeds. 

What Can I Do About It?

Once your property has a lien, you have a few options to have it removed:

• Pay the government what you owe (if possible)
• Request a payment plan to pay smaller monthly amounts
• Negotiate an offer in compromise (an agreement on a lower amount)
• Appeal the lien if you believe there is an error
• Declare bankruptcy (though this doesn’t necessarily remove all liens)

Call Us Today for Help With a Michigan Tax Lien

Now that we’ve answered the question “How long does a Michigan tax lien last?” the team at Levy & Associates is ready to assist you with all your tax lien questions. Contact us online or call 800-TAX-LEVY for more information about our Michigan tax relief services.