1. Make sure you truly owe the tax and that the assessed tax is the correct amount.
Do not always assume that what the IRS says you owe is correct. Compare your tax records with the actual IRS notice. If you did not file your own tax return, the IRS may have filed a substitute for return, called a SFR.
The amount the IRS assesses is on the SRF’s are much higher because they only give you the standard deductions.
When this happens, complete a correct tax return and send it to:
Fresno Campus ASFR
Unit Stop 81304
PO Box 24015
Fresno, California 93779
This unit of the IRS processes the tax return now filed by the taxpayer.
In the filing of the new tax return, send a cover letter asking for a ” tax reconsideration”. This could take up to 3-5 months.
2. Pay the tax in full as soon as possible.
This is the quickest way to release the Federal Tax Lien. If you pay with a cashier’s check, the IRS will immediately release the Federal Tax Lien if you walk into a local office.
Make sure you get a copy of the federal tax lien release and find out when the IRS will send a copy to your local courthouse. You will also want to check with all the credit agencies within 30 days to make sure they posted the satisfaction of release of the federal tax lien on your credit report. Remember there are three major credit reporting agencies and you want to check all three of them.
3. File an Offer in Compromise under Doubt as to Collect Ability.
Pay off the terms of the Offer in Compromise and the IRS must release the Federal Tax Lien once the Offer is paid in full and all the terms are met.
4. Find out if the statute of limitations has expired on the tax years involved.
The IRS has a 10 year period of time in which they must collect the taxes. ( there are exception s to the 10 years, so ask us for details)
The 10 year period starts when the IRS makes on assessment on the IRS computer. This is usually 6 weeks after the returns are filed. If the statute period has expired, the lien is automatically released by statute, but a release will not be sent out by the IRS. You will have to formally ask them for a copy of the release.
If you want a hard copy of the release of federal tax lien after the statute has expired, fax your request to:
IRS Centralized Lien Releases
Fax # 859-669-3805
5. Apply for a surety bond.
The cost of the bond is very expensive, but the IRS will release the Federal Tax Lien once the bond is given to them. A bond is usually as much as the payoff of the federal tax lien. For certain taxpayers this may be the way to go especially those in the construction industry.
6. Do not let the Federal Tax Lien be filed in the first place. When the Notice of Intent of Filing is sent to you, call the IRS and ask for a hearing. This will at least delay the possible filing of the Federal Tax Lien. You may give them reasons why the filing of the lien should not take place.
7. If there are special circumstances that would cause a hardship because of the filing of the Federal Tax Lien, let the IRS know of the situation
IRS Hardship situations can change the circumstances of most cases. The IRS will give due consideration for certain conditions.
8. Contact the Taxpayer’s Advocates Office if you believe there is something wrong with the filing and you want the IRS to look into the situation.
The Taxpayer’s Advocates Office is there for you. Go to IRS.gov for the nearest office.
9. If you realized you made a mistake on your own tax return and the liability is incorrect, file an amended tax return so the IRS can correct the issuance of the Federal Tax Lien.
As a follow up note, the Federal Tax Lien is very damaging to your credit score. Most lenders will not lend with the presence of the Federal Tax Lien. Do your best never to have the Federal Tax Lien filed.