by Fresh Start Tax | Mar 2, 2020 | Tax Help
We are former IRS agents and teaching instructors with the Internal Revenue Service. We can answer any question you have about a federal tax lien problems.
As former IRS agents we worked out a local, district, and regional tax offices of the Internal Revenue Service. We have over 200 years a professional tax experience and over 100 combined years working for Uncle Sam.
Call us today for free tax consultation or come by and visit our offices right here in South Florida
Get personalized service.
Since 1982, we offer free initial tax consultations.We are A+ rated by the BBB. As has former IRS agents, we filed liens, release liens and taught federal tax lien law at the Internal Revenue Service.
If a federal tax lien has affected you in some way, we can give you various options to go ahead and resolve your federal tax lien problem. Help is right here in one click away.
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 federal tax 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 places your balance due on their computer system and legally assesses your tax liability.
IRS MUST send you a bill that explains how much you owe and makes a Notice and Demand for payment and you neglect or refuse to fully pay the debt in time.
26 U.S. Code § 6321. Federal Tax Lien for taxes
If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.
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.
The Removals of Federal Tax Liens
Paying your tax debt in full is the best way to get rid of a federal tax lien.
The IRS should release your federal tax 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.
1.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) and the video Selling or Refinancing when there is an IRS Lien.
Subordination
2.”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) and the video Selling or Refinancing when there is an IRS Lien.
Withdrawal
3. “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.
There are 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:
1. 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.
2. 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.
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 Federal Tax 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.
Avoid a Federal Tax Lien if possible
You can avoid a federal tax lien by simply filing and paying all your taxes in full and on time. If you can’t file or pay on time, don’t ignore the letters or correspondence you get from the IRS. If you can’t pay the full amount you owe, payment options are available to help you settle your tax debt over time.
What s the difference between a Federal Tax Lien vs. IRS Tax Levy
A lien is not a levy.
A lien secures the government’s interest in your property when you don’t pay your tax debt.
A levy actually takes the property to pay the tax debt. If you don’t pay or make arrangements to settle your tax debt, the IRS can levy, seize and sell any type of real or personal property that you own or have an interest in.
Help Resources for Taxpayers dealing with a Federal Tax Lien
Centralized Lien Operation .
To resolve basic and routine lien issues: verify a lien, request lien payoff amount, or release a lien, call 800-913-6050 or fax 855-753-8177.
Collection Advisory Group.
For all complex lien issues, including discharge, subordination, subrogation or withdrawal; find contact information for your local advisory office in Publication 4235, Collection Advisory Group Addresses (PDF).
Office of Appeals .
Under certain circumstances you may be able to appeal the filing of a Notice of Federal Tax Lien.
Taxpayer Advocate Service
For assistance and guidance from an independent organization within IRS, call 877-777-4778.
Centralized Insolvency Operation.
If you are questioning whether your bankruptcy has changed your tax debt, call 800-973-0424.
Need help for a federal tax lien,call the experts.
Fort Lauderdale + Former IRS Agents + IRS Federal Tax Lien Help Relief
by Fresh Start Tax | Feb 28, 2020 | Tax Help
We are former IRS agents and teaching instructors with the Internal Revenue Service. We can answer any question you have about a federal tax lien problems.
As former IRS agents we worked out a local, district, and regional tax offices of the Internal Revenue Service. We have over 200 years a professional tax experience and over 100 combined years working for Uncle Sam.
Call us today for free tax consultation or come by and visit our offices right here in South Florida.
Since 1982, we offer free initial tax consultations.We are A+ rated by the BBB. As has former IRS agents, we filed liens, release liens and taught federal tax lien law at the Internal Revenue Service.
If a federal tax lien has affected you in some way, we can give you various options to go ahead and resolve your federal tax lien problem. Help is right here in one click away.
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 federal tax 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 places your balance due on their computer system and legally assesses your tax liability.
IRS MUST send you a bill that explains how much you owe and makes a Notice and Demand for payment and you neglect or refuse to fully pay the debt in time.
The authority to file Federal Tax Lien
26 U.S. Code § 6321. Federal Tax Lien for taxes
If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.
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.
The Removals of Federal Tax Liens
Paying your tax debt in full is the best way to get rid of a federal tax lien.
The IRS should release your federal tax 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.
1.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) and the video Selling or Refinancing when there is an IRS Lien.
Subordination
2.”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) and the video Selling or Refinancing when there is an IRS Lien.
Withdrawal
3. “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.
There are 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:
1. 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.
2. 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 Federal Tax 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.
Avoid a Federal Tax Lien if possible
You can avoid a federal tax lien by simply filing and paying all your taxes in full and on time. If you can’t file or pay on time, don’t ignore the letters or correspondence you get from the IRS. If you can’t pay the full amount you owe, payment options are available to help you settle your tax debt over time.
What s the difference between a Federal Tax Lien vs. IRS Tax Levy
A lien is not a levy.
A lien secures the government’s interest in your property when you don’t pay your tax debt.
A levy actually takes the property to pay the tax debt. If you don’t pay or make arrangements to settle your tax debt, the IRS can levy, seize and sell any type of real or personal property that you own or have an interest in.
Help Resources for Taxpayers dealing with a Federal Tax Lien
Centralized Lien Operation .
To resolve basic and routine lien issues: verify a lien, request lien payoff amount, or release a lien, call 800-913-6050 or fax 855-753-8177.
Collection Advisory Group.
For all complex lien issues, including discharge, subordination, subrogation or withdrawal; find contact information for your local advisory office in Publication 4235, Collection Advisory Group Addresses (PDF).
Office of Appeals .
Under certain circumstances you may be able to appeal the filing of a Notice of Federal Tax Lien.
Taxpayer Advocate Service
For assistance and guidance from an independent organization within IRS, call 877-777-4778.
Centralized Insolvency Operation.
If you are questioning whether your bankruptcy has changed your tax debt, call 800-973-0424.
Need help for a federal tax lien,call the experts.
Miami + IRS Tax Lien Help + Ways To Remove Federal Tax Lien + Former IRS Agents
by Fresh Start Tax | Feb 28, 2020 | Tax Help
We are former IRS agents and teaching instructors with the Internal Revenue Service. We can answer any question you have about a federal tax lien problems.
As former IRS agents we worked out a local, district, and regional tax offices of the Internal Revenue Service. We have over 200 years a professional tax experience and over 100 combined years working for Uncle Sam.
Call us today for free tax consultation or come by and visit our offices right here in South Florida.
Since 1982, we offer free initial tax consultations.We are A+ rated by the BBB. As has former IRS agents, we filed liens, release liens and taught federal tax lien law at the Internal Revenue Service.
If a federal tax lien has affected you in some way, we can give you various options to go ahead and resolve your federal tax lien problem. Help is right here in one click away.
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 federal tax 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 places your balance due on their computer system and legally assesses your tax liability.
IRS MUST send you a bill that explains how much you owe and makes a Notice and Demand for payment and you neglect or refuse to fully pay the debt in time.
26 U.S. Code § 6321. Federal Tax Lien for taxes
If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.
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.
The Removals of Federal Tax Liens
Paying your tax debt in full is the best way to get rid of a federal tax lien.
The IRS should release your federal tax 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.
1.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) and the video Selling or Refinancing when there is an IRS Lien.
Subordination
2.”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) and the video Selling or Refinancing when there is an IRS Lien.
Withdrawal
3. “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.
There are 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:
1. 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.
2. 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 Federal Tax 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.
Avoid a Federal Tax Lien if possible
You can avoid a federal tax lien by simply filing and paying all your taxes in full and on time. If you can’t file or pay on time, don’t ignore the letters or correspondence you get from the IRS. If you can’t pay the full amount you owe, payment options are available to help you settle your tax debt over time.
What s the difference between a Federal Tax Lien vs. IRS Tax Levy
A lien is not a levy.
A lien secures the government’s interest in your property when you don’t pay your tax debt.
A levy actually takes the property to pay the tax debt. If you don’t pay or make arrangements to settle your tax debt, the IRS can levy, seize and sell any type of real or personal property that you own or have an interest in.
Help Resources for Taxpayers dealing with a Federal Tax Lien
Centralized Lien Operation .
To resolve basic and routine lien issues: verify a lien, request lien payoff amount, or release a lien, call 800-913-6050 or fax 855-753-8177.
Collection Advisory Group.
For all complex lien issues, including discharge, subordination, subrogation or withdrawal; find contact information for your local advisory office in Publication 4235, Collection Advisory Group Addresses (PDF).
Office of Appeals .
Under certain circumstances you may be able to appeal the filing of a Notice of Federal Tax Lien.
Taxpayer Advocate Service
For assistance and guidance from an independent organization within IRS, call 877-777-4778.
Centralized Insolvency Operation.
If you are questioning whether your bankruptcy has changed your tax debt, call 800-973-0424.
Need help for a federal tax lien,call the experts.
Ft.Lauderdale + IRS Tax Lien Help + Ways To Remove Federal Tax Lien + Former IRS Agents
by Fresh Start Tax | Feb 28, 2020 | Tax Help
We are former IRS agents and teaching instructors with the Internal Revenue Service. We can answer any question you have about a federal tax lien problems.
Since 1982, we offer free initial tax consultations. We are A+ rated by the BBB.
As has former IRS agents, we filed liens, release liens and taught federal tax lien law at the Internal Revenue Service.
If a federal tax lien has affected you in some way, we can give you various options to go ahead and resolve your federal tax lien problem. Help is right here in one click away.
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 federal tax 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 places your balance due on their computer system and legally assesses your tax liability.
IRS MUST send you a bill that explains how much you owe and makes a Notice and Demand for payment and you neglect or refuse to fully pay the debt in time.
26 U.S. Code § 6321. Federal Tax Lien for taxes
If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.
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.
The Removals of Federal Tax Liens
Paying your tax debt in full is the best way to get rid of a federal tax lien.
The IRS should release your federal tax 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.
1.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) and the video Selling or Refinancing when there is an IRS Lien.
Subordination
2.”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) and the video Selling or Refinancing when there is an IRS Lien.
Withdrawal
3. “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.
There are 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:
1. 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.
2. 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 Federal Tax 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.
Avoid a Federal Tax Lien if possible
You can avoid a federal tax lien by simply filing and paying all your taxes in full and on time. If you can’t file or pay on time, don’t ignore the letters or correspondence you get from the IRS. If you can’t pay the full amount you owe, payment options are available to help you settle your tax debt over time.
What s the difference between a Federal Tax Lien vs. IRS Tax Levy
A lien is not a levy.
A lien secures the government’s interest in your property when you don’t pay your tax debt.
A levy actually takes the property to pay the tax debt. If you don’t pay or make arrangements to settle your tax debt, the IRS can levy, seize and sell any type of real or personal property that you own or have an interest in.
Help Resources for Taxpayers dealing with a Federal Tax Lien
Centralized Lien Operation .
To resolve basic and routine lien issues: verify a lien, request lien payoff amount, or release a lien, call 800-913-6050 or fax 855-753-8177.
Collection Advisory Group.
For all complex lien issues, including discharge, subordination, subrogation or withdrawal; find contact information for your local advisory office in Publication 4235, Collection Advisory Group Addresses (PDF).
Office of Appeals .
Under certain circumstances you may be able to appeal the filing of a Notice of Federal Tax Lien.
Taxpayer Advocate Service
For assistance and guidance from an independent organization within IRS, call 877-777-4778.
Centralized Insolvency Operation.
If you are questioning whether your bankruptcy has changed your tax debt, call 800-973-0424.
Need help for a federal tax lien,call the experts.
Help with a Federal Tax Lien Problems, Former IRS Agents + Since 1982
by Fresh Start Tax | Feb 28, 2020 | Tax Help
As a former IRS agent, here is the relative info you need to know about the federal tax lien, stay informed.
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.
Rules for a tax lien.
A federal tax lien exists after:
The IRS:
1. Puts your balance due on the books (assesses your liability);
2. 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.
KEY: notice and demand must be given.
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.
Different Ways to REMOVE a Federal Tax 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.
Discharge of property from the Federal Tax Lien
What is a Discharge When it Comes to IRS Tax Liens?
The discharge of an IRS tax lien removes the lien from a specific piece of property. If you apply for a lien discharge and the IRS grants your request, you can sell or refinance the property named in your certificate of discharge.
Without the lien discharge, anyone who buys your property takes it subject to the IRS tax lien. If someone buys your home, the buyer would not be responsible for your delinquent tax debt.
However, the IRS could still seize the property. The tax lien will drive away any potential buyers because they won’t want to be responsible for your tax problems.
When you apply for a tax lien discharge, you will have to show the IRS that you are willing to protect their interests. If you have several valuable assets subject to the lien, the IRS may grant a lien discharge for one piece of property. The lien still stands against all other properites.
What Happens When the IRS Discharges a Tax Lien?
You will receive a certificate of discharge that removes the IRS tax lien from your property. But this discharge only applies to the property named in the certificate.Remember, only that property.
If you receive a lien discharge, two things will NOT be affected:
1. You will still owe your back taxes to the IRS, including any penalties and interest.
2. The IRS tax lien will still cover all property other than the assets named explicitly in the lien discharge.
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, see Instructions on:
How to Apply for Certificate of Discharge From Federal Tax Lien (PDF) and the video Selling or Refinancing when there is an IRS Lien.
IRS Subordination
“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) and the video Selling or Refinancing when there is an IRS Lien.
Why and How to Apply for a Federal Tax Lien Subordination
An IRS tax lien encumbers all of your property, even if you aren’t aware that the tax lien exists.
The tax lien is not an immediate collection action. You still get to keep the property subject to one, but you may not be able to sell or refinance the property unless you eliminate the tax lien.
Other popular options pertain to requesting a lien discharge or lien subordination.
A tax lien discharge completely removes the lien from a specific piece of property.
A Federal tax lien subordination keeps the tax lien in place but permits another creditor to move ahead of the IRS in priority. Consequently, it may allow you to get a loan or refinance your mortgage.
What is a Subordination When it Comes to IRS Tax Liens?
When you get a loan, some creditors take a security interest in your property. The most common example is a mortgage, where a creditor takes a security interest in your home.
If you don’t pay your mortgage, the security interest gives the creditor the right to foreclose on your home. Your home becomes the collateral to the lender.
Several creditors can have a security interest in the same property, but their interests are ranked according to priority.
Your first mortgage lender would have a higher priority than a second mortgage lender, which means that they get paid first from the proceeds of a foreclosure auction.
If you have an IRS tax lien on your property, that lien will take priority over any loans you receive after the tax lien exists.
Creditors may not wish to give you a second mortgage loan because their security interest will be inferior to the IRS tax lien interest.
An IRS tax lien subordination is an agreement that allows a new creditor to move ahead of the IRS in priority.
The IRS tax lien will remain on the property. However, it will have a lower position than the new lender’s security interest.
What Happens If the IRS Subordinates a Tax Lien?
The IRS will issue you a Certificate of Subordination.
It permits a junior creditor to move ahead of the IRS tax lien in priority.
However, the IRS tax lien remains in place on this priority.
The tax lien also stays in place on all of your other real and personal property, and you still owe your tax liability in full, including interest and penalties.
An IRS lien subordination does not solve your tax debt problems. But it could allow you to get a loan or refinance your home, which could free up more money to pay off your tax debt.
You may want to talk to a tax professional about what you can do to reduce your tax debt.
Why Would a Taxpayer Want to Subordinate A Federal Tax Lien?
You may not be able to get a loan or refinance an existing mortgage while the IRS tax lien is in place. If you get a Certificate of Subordination, then a creditor may be willing to extend credit.
You may wish to get a second mortgage loan and use the money to pay off your tax debt, or you could refinance your existing mortgage to lower your monthly mortgage payments. A tax lien subordination can also apply to assets besides your home, including business property.
If you want to sell the property encumbered by the IRS tax lien, a lien subordination probably won’t help. You may have to request a discharge of an IRS tax lien to complete the sale.
How Can a Taxpayer Request a Federal Tax Lien Subordination?
Apply for a certificate of subordination of federal tax lien by following the instructions in Pub 784. You will need to complete Form 14134.
It is important to apply at least 45 days before a loan settlement conference.
If you need assistance, contact a tax professional for help completing and filing the form and the necessary attachments.
You will need to provide the IRS a basis for subordinating the lien. The IRS will only agree to the lien subordination if it is in their best interests.
There are two main reasons that the IRS will agree to issue you a certificate of subordination:
- One.The IRS may subordinate the tax lien if you agree to pay them an amount equal to the interest they are subordinating.
- Two. The IRS may subordinate their interest if it increases the amount they will realize.
Can You Appeal a Denial of a Request for a Subordination?
You have appeal rights after a denial of a request for lien subordination. You may first attempt to talk to the manager of the IRS employee who denied your request. If they don’t grant your request or respond to your inquiry, you can submit a CDP using form 9423.
Contact a tax professional for help filing your lien subordination request. If the IRS grants your application, you could improve your financial situation and get closer to paying off your tax debt. For estate tax liens (not discussed above), use Form 4422 if selling, or Publication 1153 if you are refinancing.
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 the Federal Tax Lien Affects Taxpayers
• 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.
Lien vs. Levy
A lien is not a levy. A lien secures the government’s interest in your property when you don’t pay your tax debt. A levy actually takes the property to pay the tax debt. If you don’t pay or make arrangements to settle your tax debt, the IRS can levy, seize and sell any type of real or personal property that you own or have an interest in.
Help Resources
Centralized Lien Operation — To resolve basic and routine lien issues: verify a lien, request lien payoff amount, or release a lien, call 800-913-6050 or fax 855-753-8177.
Collection Advisory Group — For all complex lien issues, including discharge, subordination, subrogation or withdrawal; find contact information for your local advisory office in Publication 4235, Collection Advisory Group Addresses (PDF).
Office of Appeals — Under certain circumstances you may be able to appeal the filing of a Notice of Federal Tax Lien. For more information, see Publication 1660, Collection Appeal Rights (PDF).
Taxpayer Advocate Service — For assistance and guidance from an independent organization within IRS, call 877-777-4778.
Centralized Insolvency Operation — If you are questioning whether your bankruptcy has changed your tax debt, call 800-973-0424.
About the Lien
The Internal Revenue Service routinely files federal liens against taxpayers who have unpaid tax obligations. A federal tax lien is a document that goes on record with a county government, usually where the taxpayer lives or conducts business, notifying the general public that the taxpayer has an unpaid federal tax debt. Liens attach to the taxpayer’s real property or personal property.
What Does a Lien Do?
When property is sold while a lien is in effect against it, the IRS is paid out of the sales proceeds before the taxpayer receives any money. The lien becomes a matter of public record when it’s filed. Liens record the full amount owed to the IRS.
Some people use the words “lien” and “levy” interchangeably, but liens are different from levies. A tax lien is a document filed by the IRS to protect the government’s ability to collect money, while a levy is the forced collection of tax, usually by confiscating money directly out of a bank account or paycheck.
Notifying Taxpayers That a Lien Has Been Filed
The IRS generally notifies taxpayers after a federal tax lien has already been filed. The IRS will send taxpayers a Notice of Federal Tax Lien. Federal liens are effective 10 days after the IRS issues a written demand for payment of outstanding taxes.
Preventing a Lien
Federal tax liens can be prevented by paying the tax in full before a lien is filed by the IRS. Liens can also be prevented by setting up an installment agreement with the IRS that meets certain requirements. The IRS will not file a federal tax lien if a taxpayer sets up either a guaranteed installment agreement or a streamlined installment agreement.
These types of installment agreements require that the outstanding balance be $10,000 or less in the case of a guaranteed installment agreement, or $25,000 or less in the case of a streamlined installment agreement.
If a taxpayer owes more than $25,000, a lien can be prevented if the taxpayer pays down the balance so it’s $25,000 or less and he can establish a streamlined installment agreement.
Removing a Lien
The IRS will remove a federal tax lien if the lien was filed in error, when the outstanding balance is paid in full, or if the outstanding balance is otherwise satisfied, such as through a successful offer in compromise. It will also remove the lien if it becomes unenforceable. This can happen if it’s expired due to the 10-year statute of limitations.
There are two basic ways to remove a federal tax lien: withdrawal and release.
Withdrawing a Federal Tax Lien
Withdrawing a federal tax lien means the IRS will rescind the lien as if it was never filed in the first place. Lien withdrawals generally occur when the tax lien was filed in error, such as against the wrong taxpayer.
Contact the IRS right away if a lien was filed against you in error. An IRS agent will review your account history to verify that you don’t owe the outstanding tax and will prepare the paperwork necessary to withdraw it.
The IRS has instituted a Fresh Start Program under which taxpayers might be eligible for lien withdrawal provided certain criteria are met.
Releasing a Federal Tax Lien
Releasing a federal lien means that the lien no longer encumbers your property. County records will be updated to reflect that the lien has been released. Liens are released within 30 days of full payment of the outstanding tax obligation, or upon setting up a guaranteed or streamlined installment agreement.
Less frequently, the IRS might release a federal tax lien if it will speed up the collection of tax or if it’s in the best interests of the taxpayer and the government. But most federal tax liens are automatically released by the IRS after full payment of the tax owed.
Under the Fresh Start Program, taxpayers can be eligible for lien release if their outstanding balance is under $25,000.
You might consider bringing your balance under $25,000 by transferring some or all of your tax to a credit card or home equity line, or by making payments to bring your balance under the $25,000 threshold.
WHAT YOU NEED TO KNOW ABOUT THE FEDERAL TAX LIEN, former irs agent
