How long did South Carolina Revenue Ruling 15-6 say a Department of Revenue tax lien remained enforceable?

Plain-English summary

South Carolina Revenue Ruling 15-6 held that a Department of Revenue tax lien expires ten years after it is filed with a clerk of court or register of deeds.

When that ten-year period ends, the ruling said the lien:

• is no longer enforceable in any manner; and
• ceases to be an encumbrance on any property of the affected taxpayer.

The filing date—not merely the assessment date—starts the ten-year continuation period addressed by the ruling.

How the lien arises

Under the quoted Section 12-54-120, when a person neglects or refuses to pay tax after demand, the tax, interest, additions, penalties, and accrued costs become a lien in favor of the Department on all of that person's property and property rights.

The statute described "demand" as a Department assessment. The lien was effective on the assessment date and could reach real or personal, tangible or intangible property, including bank deposits and other property not capable of manual levy or delivery.

But the lien's enforceable filing life was limited: it continued for ten years from filing.

Common questions

Q: Does the lien last until the tax is paid?

A: No. RR 15-6 said the filed lien expired ten years after filing even if the assessment remained unpaid.

Q: When does the ten-year period start?

A: On the date the lien is filed with the clerk of court or register of deeds.

Q: What happens to property after expiration?

A: The expired lien no longer encumbers the taxpayer's property and cannot be enforced.

Q: Did the ruling eliminate every other Department remedy?

A: No. The statute quoted in the ruling said the tax lien and its limitations were in addition to other Department liens or remedies and did not affect them.

Citations and references

• S.C. Code Ann. Section 12-54-120 (tax lien creation, reach, enforcement, and ten-year continuation)
• S.C. Code Ann. Section 12-54-122 (additional limitations referenced by Section 12-54-120)

Subject

Expiration of Tax Liens

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR15-6.pdf

Original ruling text

STATE OF SOUTH CAROLINA

DEPARTMENT OF REVENUE
300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 12265, Columbia, South Carolina 29211

SC REVENUE RULING #15-6

SUBJECT:

Expiration of Tax Liens
(All Taxes)

EFFECTIVE DATE:

Applies to all periods open under the statute.

SUPERSEDES:

All previous advisory opinions and any oral directives in conflict
herewith.

REFERENCE:

S.C. Code Ann. Section 12-54-120 (2014)

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (2014)
S.C. Code Ann. Section 1-23-10(4) (Supp. 2014)
SC Revenue Procedure #09-3

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the public. It
is an advisory opinion issued to apply principles of tax law to a set of
facts or general category of taxpayers. It is the Department’s position
until superseded or modified by a change in statute, regulation, court
decision, or another Departmental advisory opinion.

Question:
Is a tax lien filed by the Department of Revenue valid until the applicable assessment is paid or
does a tax lien expire after a period of time?
Conclusion:
A tax lien filed by the Department of Revenue expires ten years after it is filed with a clerk of
court or register of deeds. Upon expiration, the tax lien is no longer enforceable in any manner
and ceases to be an encumbrance upon any property of the affected taxpayer.
Discussion:
Code Section 12-54-120 concerns tax liens, and states:

(A)(1) If a person liable to pay a tax neglects or refuses to pay it after demand, the
amount of the tax, including interest, additional tax, addition to tax, or assessable
penalty, plus accrued costs, is a lien in favor of the Department of Revenue on all
property and rights to property, real or personal, tangible or intangible, belonging
to the person.
(2) This lien:
(a) is referred to as a "tax lien";
(b) is effective on the date of the assessment of the tax;
(c) allows an authorized agent of the department to seize, levy on, and sell the
property of the person for the payment of the amount due, with added penalties,
interest, and costs of executing on the lien, and to pay the money collected to the
department;
(d) extends to bank deposits, choses in action, and all other property incapable of
manual levy or delivery; and
(e) continues for ten years from the date of filing.
(3) "Demand", as used in this section, means an assessment by the department.
(B) This tax lien and the limitations in Section 12-54-122 are in addition to all
other liens or remedies in favor of the department and does not affect any other
lien or remedy.
(C) The department, in addition to other remedies for enforcement of its tax lien,
retains all remedies available to a judgment. (Emphasis added.)
Based on the above, a tax lien is effective on the date of the assessment by the Department and
expires ten years after the tax lien is filed with a clerk of court or register of deeds. Upon
expiration, the tax lien is no longer enforceable in any manner and ceases to be an encumbrance
upon any property of the affected taxpayer.
SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Rick Reames III
Rick Reames III, Director
June 25
, 2015
Columbia, South Carolina