Release of Federal Tax Liens through Notice of Withdrawal and Improve your Credit Score

Release of Federal Tax Liens through Notice of Withdrawal and Improve your Credit Score

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There has been recent changes to the Federal Tax Law due to the increasing public outcry on the burden the IRS has been putting on taxpayers through the Filing of the Federal Tax Liens.

As a result it is now possible to have your Federal Tax Lien completely withdrawn. By this process the credit companies will adjust your credit scores to the level as though the Federal Tax Lien was never filed.

Call us today for immediate tax representation 1-866-700-1040

If the IRS has filed a Federal Tax Lien and you have either paid off the tax liability or have gone on direct deposit and met the lien withdrawal criteria fill out form 11227

The process of Release or Removal of Federal Tax Liens:

IRS has increased  the lien filing threshold.

The Internal Revenue Service Fresh Start Program changes increase the IRS lien filing threshold from $5,000 to $10,000.

Federal Tax Liens may still be filed on amounts less than $10,000 when circumstances warrant.If the IRS feels that the collection of the tax is in jeopardy or the assets will be moved the IRS can proceed to filed the Federal Tax Lien

Requesting a federal lien withdrawal after the lien has been released:

The IRS may now  because of the Fresh Start Program issue a withdrawal of a  Notice of Federal Tax Lien after the lien has been released.

If you wish to have the Notice of Federal Tax Lien withdrawn, a taxpayer must request the withdrawal in writing.

  •  Taxpayers should use IRS  Form 12277, Application for Withdrawal, (PDF form available ). In item 8, Reason for requesting withdrawal, check box hat is applicable to your case.

Eligibility requirements are as follows:

1. Your tax liability has been satisfied and your lien has been released
2. You are in compliance for the past three years in filing:
3. All individual and business returns have been filed
4. All information returns have been filed
5. You are current on your estimated tax payments and federal tax deposits, as applicable.

Federal Tax Lien withdrawal may also occur when after entering into a Direct Debit installment agreement.

If you are a qualifying taxpayer and meet the eligibility requirements, you may have your lien withdrawn after entering into a Direct Debit installment agreement.

Your request for lien withdrawal must be in writing. Please use Form 12277, Application for Withdrawal (PDF). In item 8, “Reason for requesting withdrawal,” check box b, the “entered into an installment agreement” provision.

Qualifying taxpayers are:

  • Individuals (Form 1040 tax)
  • Businesses with income tax liability only
  • Out of business entities with any type of tax debt

Eligibility Requirements are:

  • The current amount you owe must be $25,000 or less
  • If you owe more than $25,000, you may pay down the balance to $25,000 prior to requesting the lien withdrawal to be eligible
  • 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 must be in full compliance with other filing and payment requirements
  • You must have made three consecutive direct debit payments
  • You cannot have previously received a lien withdrawal for the same taxes unless the withdrawal was for an improper filing of the lien
  • You cannot have defaulted on your current, or any previous, direct debit installment agreement.

Good News on this change that will effect thousands of taxpayers. Your credit scores should rise as though the federal tax lien was never filed.

If you are currently on a regular installment agreement, you may convert to a Direct Debit Installment Agreement.

To convert a regular installment agreement to a Direct Debit Installment Agreement:

Call us today for more details. You will speak to either a Board Certified Tax Attorney, CPA or Former IRS Agents.

About Michael Sullivan

Michael Sullivan is Former Award Winning IRS Agent and Teaching Instructor with the Internal Revenue Service. Mr. Sullivan worked in the local, district and regional offices of the IRS.
Mr. Sullivan has been in private practice since 1982 and is a tax expert in the field of Federal and State Tax Resolution.
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