How Long Does a Restitution Lien Last?

If you are working to pay off unpaid restitution penalties, it can seem like the collection period will go on forever. Compounding interest and penalties, not to mention new liabilities incurred in the meantime can mean even regular payments don’t reduce the total amount you owe. If you find yourself on that treadmill, you may wonder, how long does a restitution lien last?

Federal Civil Restitution Treated as a Tax Lien for Enforcement

A recent case out of the United States District Court for the District of Columbia provides a useful example for considering just how long a restitution lien lasts. In the United States v. Jones, Mr. Jones pled guilty to federal fraud charges in 2001. He was sentenced to 60 months (5 years) in prison, and ordered to pay his victims $354,936 in restitution. He got out of prison in June 2005. Now, 20 years later, the case is back in court as the U.S. government has made one last attempt to collect his restitution debts.

Over the 20 years since his release, Mr. Jones had paid around $94,000 in restitution, but because of interest he still owed almost $420,000. The U.S. Government asked the federal court to issue a write of execution, placing a levy on his home (worth around $340,000) to cover the outstanding debt.

How Long Does a Restitution Lien Last?

It turns out, the statute that Mr. Jones was sentenced under, the Mandatory Victims Restitution Act (MVRA) requires restitution to be collected using the same statute as tax liens and other civil remedies for unpaid fines. While restitution and tax liens are not the same thing, the District Court said the United States tax code provided the legal mechanisms for the government to collect restitution from Mr. Jones and others like him. That includes the fact that the order of restitution in Mr. Jones’s case created a lien on all his property in favor of the United States “until the liability is satisfied, remitted, set aside or terminated.”

The short answer for how long a restitution lien lasts 20 years after the entry of judgment. But if a criminal defendant is sentenced to imprisonment, that 20 years starts counting after the person is released. This can extend the collection period for several years, especially in severe fraud cases, like United States vs Jones. His 60 months of incarceration meant that his restitution liability was not terminated until June 3, 2025, twenty years after he was released from prison.

Can the Government Extend the Duration of a Tax Lien by Filing a Lawsuit?

The biggest question in Mr. Jones’s case was whether the U.S. Government could extend its collection period by filing an eleventh hour writ of execution to place a levy on his home just weeks before that 20-year collection period was set to expire? It turns out, the answer is no. The District Court decided that the lien on Mr. Jones’s property and his liability to pay the restitution were essentially one and the same. When Mr. Jones’s restitution liability expired on June 3, 2025, so did the lien on his house.

The government tried anyway, relying on a different section of the tax code that said the collection period for a tax levy could be extended while a timely collections case was pending in court. But that section also required such tax levies to begin “within 10 years after the assessment of the tax.” The District Court said that the government couldn’t use one sentence of the statute and ignore the other, so it referred back to the 20-year time limit, which did not have the same exception for cases filed as the clock was running out. Because the Government was asking the Court to find that a lien was independent of the restitution liability on which it is based, the Court ruled against it, saying that only the $94,000 already collected could be distributed to Mr. Jones’s victims.

In reaching its decision, the District Court declined to treat restitution liens as the same as tax liens. The Court said that it did not need to use the tax code’s enforcement extension, addressed above. The MVRA had referenced a different section of the tax code, which applied specifically to restitution cases. Even though an earlier decision from the Southern District of Florida had applied an older victim restitution statute, which referred directly to the tax code, the Court in Mr. Jones’s case said the MVRA’s limits on how long a restitution lien lasts applied instead. Once the restitution liability expired, the lien terminated, so there was no basis for the Government to obtain a levy on Mr. Jones’s home.

Attorney Joseph R. Viola is a tax attorney in Philadelphia, Pennsylvania with over 35 years experience. If you have questions about tax or restitution liens, contact Joe Viola to schedule a free consultation.