Adjustments to IRS Lien Policies
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The Fresh Start changes increase the IRS lien filing threshold from $5,000 to $10,000. Liens may still be filed on amounts less than $10,000 when circumstances warrant. The IRS will not retroactively apply the new $10,000 lien 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 If you wish to have the Notice of Federal Tax Lien withdrawn, you must request the withdrawal in writing.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 8, Reason for requesting withdrawal, check box d, the best interest provision.
Generally, eligibility requirements are:
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
4. All information returns
5. You are current on your estimated tax payments and federal tax deposits, as applicable.
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If you are a qualifying taxpayer and meet the eligibility requirements, you may have your lien withdrawn after entering into a Direct Debit installment agreement.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:
1. Individuals (Form 1040 tax)
2. Businesses with income tax liability only
3. 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
If 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.
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