We are experts in the removal and releasing of the Federal Tax Lien.
There are various ways to get a federal tax lien released. The first and most obvious way is to pay the federal tax lien often full, to set up a part pay agreement with Internal Revenue Service on direct debit and meet the qualifications thereof ( Read Below ), and the third way is to have the statute of limitations expire on the existing IRS tax debt.
I would advise taxpayers to pull a credit report to make sure they know where the federal tax liens were filed. Many times, IRS can file them in multiple places.
Credit reports can help assure clients and taxpayers were federal tax liens were filed.
It is possible that taxpayers have property in other states or assets in other states. If IRS is aware this, they might may file multiple liens.
Also if you live near two counties or boroughs, many times the IRS will file liens in both.
They are the same federal tax lien but all liens will have to be released to make sure your credit report is squared away.
There are other ways to get your federal tax lien released and after a careful review on your case we will go over different conditions and exceptions that may exist and there are others.
Read below and find out some of the other methods.
Each situation is different and upon your review with our office we will let you know how to get your federal tax lien removes release and removed as fast as possible.
When you get your federal tax lien released it will be necessary for you to contact a different credit agencies to make sure they have a copy so it can affect your new credit score.
What is a Federal Tax Lien
A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt.
The lien protects the government’s interest in all your property, including real estate, personal property and financial assets.
A federal tax lien exists after the IRS:
• Puts your balance due on the books (assesses your liability);
• Sends you a bill that explains how much you owe (Notice and Demand for Payment); and
You:
• Neglect or refuse to fully pay the debt in time.
The IRS files a public document, the Notice of Federal Tax Lien, to alert creditors that the government has a legal right to your property. F• How to Get Rid of a Lien
How to Get Rid of a Lien
Paying your tax debt – in full – is the best way to get rid of a federal tax lien. The IRS releases your lien within 30 days after you have paid your tax debt.
When conditions are in the best interest of both the government and the taxpayer, other options for reducing the impact of a lien exist.
The general statute of limitation.
On a federal tax lien it is 10 years from the date of assessment.
I can review your case file with you to determine the period of time to determine whether your tax debt has already been forgiven and that you can obtain a release of the federal tax lien.
To find out the official period of time that is left on your statute you will need to pull an IRS tax transcript, we can help with the process and evaluate the transcript and let you know your official statutory time left that IRS has to collect back taxes.
Discharge of property
A “discharge” removes the lien from specific property.
There are several Internal Revenue Code (IRC) provisions that determine eligibility. For more information, refer to Publication 783, Instructions on How to Apply for Certificate of Discharge From Federal Tax Lien (PDF).
Subordination
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Subordination” does not remove the lien, but allows other creditors to move ahead of the IRS, which may make it easier to get a loan or mortgage.
To determine eligibility, refer to Publication 784, Instructions on How to Apply for a Certificate of Subordination of Federal Tax Lien (PDF).
Withdrawal
A “withdrawal” removes the public Notice of Federal Tax Lien and assures that the IRS is not competing with other creditors for your property; however, you are still liable for the amount due.
For eligibility, refer to Form 12277, Application for the Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien (Internal Revenue Code Section 6323(j)) (PDF) and the video Lien Notice Withdrawal.
Two additional Withdrawal options resulted from the Commissioner’s 2011 Fresh Start initiative.
One option may allow withdrawal of your Notice of Federal Tax Lien after the lien’s release.
General eligibility includes:
Your tax liability has been satisfied and your lien has been released; and also:
• You are in compliance for the past three years in filing – all individual returns, business returns, and information returns;
• You are current on your estimated tax payments and federal tax deposits, as applicable.
The other option may allow withdrawal of your Notice of Federal Tax Lien if you have entered in or converted your regular installment agreement to a Direct Debit installment agreement. General eligibility includes:
• You are a qualifying taxpayer (i.e. individuals, businesses with income tax liability only, and out of business entities with any type of tax debt)
• You owe $25,000 or less (If you owe more than $25,000, you may pay down the balance to $25,000 prior to requesting withdrawal of the Notice of Federal Tax Lien)
• Your Direct Debit Installment Agreement must full pay the amount you owe within 60 months or before the Collection Statute expires, whichever is earlier
• You are in full compliance with other filing and payment requirements
• You have made three consecutive direct debit payments
• You can’t have defaulted on your current, or any previous, Direct Debit Installment agreement.
How a Lien Affects You
• Assets — A lien attaches to all of your assets (such as property, securities, vehicles) and to future assets acquired during the duration of the lien.
• Credit — Once the IRS files a Notice of Federal Tax Lien, it may limit your ability to get credit.
• Business — The lien attaches to all business property and to all rights to business property, including accounts receivable.
• Bankruptcy — If you file for bankruptcy, your tax debt, lien, and Notice of Federal Tax Lien may continue after the bankruptcy.
