After years of making taxpayers suffer, the Internal Revenue Service has come up with a new program that will help thousands and thousands of taxpayers.
As a former IRS agent I cannot tell you the amount of times I’ve signed a federal tax lien.
It would be in the thousands. We would file lien at the drop of a hat.We had to file those federal tax liens because that was the IRS policy. But now after years of taxpayer hardships, complaints and new IRS programs, the Internal Revenue Service is making it easier to each of federal tax lien released
The federal tax lien is very damaging to taxpayers for years to come because of what it does to a taxpayer’s credit score.
One of the problems in trying to pay the Internal Revenue Service in full, it limits the amount of money you could borrow, secure a loan to pay the tax off in full because of the lien has such a damaging impact.
New IRS Program to Get a Federal Tax Lien Released The Fresh Start changes increase the IRS Notice of Federal Tax Lien filing threshold from $5,000 to $10,000.
Notices of Federal Tax Liens may still be filed on amounts less than $10,000 when circumstances warrant however the IRS will not retroactively apply the new $10,000 lien notice filing threshold and automatically withdraw a previously filed lien.
Requesting a lien withdrawal after the lien has been released
The IRS may now issue a withdrawal of a filed Notice of Federal Tax Lien after the lien has been released.
If you wish to have the Notice of Federal Tax Lien withdrawn, you must request the withdrawal in writing.
Please use Form 12277, Application for Withdrawal (PDF).
In item 11, Reason for requesting withdrawal, check the last box,
“The taxpayer, or the Taxpayer Advocate acting on behalf of the taxpayer, believes withdrawal is in the best interest of the taxpayer and the government.”
Generally, eligibility requirements are:
- Your tax liability has been satisfied and your lien has been released
- You are in compliance for the past three years in filing:
- All individual and business returns
- All information returns
- You are current on your estimated tax payments and federal tax deposits, as applicable.
- Notice of Federal Tax Lien withdrawal after entering into a Direct Debit installment agreement.
If you are a qualifying taxpayer and meet the eligibility requirements, you may have your filed Notice of Federal tax Lien withdrawn after entering into a Direct Debit installment agreement.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 11, :
“Reason for requesting withdrawal,” check the third box , “The taxpayer is under a Direct Debit Installment Agreement.“
Qualifying taxpayers are:
- Individuals
- 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, also:
- 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
If you are currently on a regular installment agreement, you may convert to a Direct Debit Installment Agreement.
If you default on your Direct Debit Installment Agreement
If you default on your Direct Debit Installment Agreement after the lien is withdrawn, a new notice of lien may be filed and collection efforts may resume.
Last year approximately 950,000 liens were filed by the Internal Revenue Service. you should be aware that if you contact IRS before the filing of the 1058 letter you have a good possibility of the IRS not filing your federal tax lien.
Contact us today to learn more.
New IRS Program to Get a Federal Tax Lien Released, Former IRS
