Tax Blog

IRS Tax Lien Removal Explained

By Kelly Hanley, Esq., Tax Attorney

In my 20 years of traversing the turbulent waters of tax law, nothing quite elicits the gasps of horror from my clients as the phrase “tax lien“. But fear not! This blog on tax lien removal will challenge your assumptions, shatter common myths, and inject a much-needed dose of reality into the fearful ghost story that is often peddled to taxpayers about tax liens. 

Removing Tax Liens: Not a Myth, but a Reality 

Clearing a tax lien typically involves paying your tax debt in full, which prompts the IRS to release your lien within a month. However, alternative methods may also be effective if they serve the best interests of both the taxpayer and the government. Understanding these strategies for tax lien removal can be crucial in lessening its impact on your financial health.

Does Bankruptcy Remove Tax Liens?

Ah, the million-dollar question. Many believe that declaring bankruptcy is the equivalent of a get-out-of-jail-free card when it comes to tax liens. The truth? Not always.

While a discharge in bankruptcy might help in wiping out your obligation to pay off certain debts, it doesn’t necessarily mean your tax lien will disappear into thin air. In fact, tax liens often survive bankruptcy, and you may find the IRS has the right to take your property to satisfy a tax lien, even after a bankruptcy discharge. 

So before jumping on the bankruptcy bandwagon, make sure you understand its implications. A hasty decision might end up being a leap from the frying pan into the fire. 

Imagine, if you will, going to your mailbox and finding an envelope with “Internal Revenue Service” stamped on it. Your heart starts pounding like a jackrabbit on energy drinks. You tear it open, and there it is—the dreaded Notice of Federal Tax Lien

This is no friendly pen pal correspondence. It’s a formal claim by the IRS against your property, both present and future, because of your tax debt. But what does it really mean, and is it as terrible as it sounds?

Notice of Federal Tax Lien: The Unwanted Letter

It’s Not Always a Nightmare 

Contrary to the popular belief of most taxpayers, a Notice of Federal Tax Lien isn’t always a one-way ticket to financial ruin. In some cases, it can be a wake-up call, an opportunity to straighten out your financial affairs with the IRS. Think of it as a loud, somewhat terrifying alarm clock. You might not like the sound it makes, but it’s sure to get you out of bed.

IRS Lien Release: The Art of Negotiation 

Once you’ve overcome the initial shock and awe of receiving a tax lien, your immediate goal becomes IRS lien release. So, how do you achieve it? Here’s where the art of negotiation comes into play.

You Have More Power than You Think

Many believe that when you’re faced with a tax lien, you’re completely at the mercy of the IRS. But that’s not entirely accurate. The IRS isn’t the big, bad wolf it’s often made out to be. You have options, and you can negotiate.

For example, you could apply for a Certificate of Discharge, which removes the lien from specific property. You might also negotiate an installment agreement, where you agree to pay off your debt over time, and in turn, the IRS may withdraw the tax lien. A tax lien paid removal isn’t always a monumental task—it can be an exercise in savvy negotiation. 

Tax Lien Help: Find Your Trusty Guide

You don’t have to navigate the tax lien forest alone. With the right tax lien help, you can cut through the thicket of confusion and arrive safely on the other side. 

Choose Your Guide Wisely

Yes, even in the gravest of tax situations, humor has its place. When choosing a tax attorney, remember this: You don’t want a “Jack of all trades, master of none. You need a Master Yoda of tax lien removal, not a Jedi in training. Someone who knows the ins and outs of the IRS, the nuances of tax law, and the tricks of the trade to successfully negotiate tax lien removal.

Get a Tax Lien Removed: The Path Forward 

Now, you might be wondering, “How do I get a tax lien removed?” The answer is as unique as you are. It depends on your circumstances, your financial health, and your ability to negotiate with the IRS for a lien withdrawal.

You might be able to get a tax lien removed through direct negotiation, by fulfilling a payment plan, or by demonstrating that the lien is causing an economic hardship. In some cases, you might even be able to request that the IRS withdraw the lien, essentially erasing it as if it never existed. 

While tax lien removal can be a complex process, remember this: You have options. You have the power to negotiate. And with the right help and guidance, you can navigate through the storm and reach calmer waters. 

The world of tax lien removal isn’t as terrifying as it might initially seem. It’s full of counter-narrative truths and counter-intuitive strategies. And remember, the ghost story is only scary until you turn on the lights. In reality, it’s just a challenge waiting to be overcome.

Lean on Us: Help is a Phone Call Away

Facing a tax lien and trying to get a lien release can be overwhelming, but you don’t have to navigate these waters alone. The Tax Defenders are here to provide expert guidance and help you explore your options. Give us a call at 312-345-5440 to schedule a free consultation with an experienced tax attorney. Our professionals will work with you to develop a personalized strategy to deal with your tax lien, providing clarity and peace of mind during this stressful time.

Can the IRS refile tax lien after 10 years?

In the riveting world of tax law, time is often more than just a ticking clock—it can be a powerful ally. One question I frequently encounter as a seasoned tax attorney is: “Can the IRS refile a tax lien after 10 years?” A common myth is that the IRS can pounce at any time, but there’s more to the story.

Generally, no, they can’t. You see, IRS liens typically expire after 10 years. This period starts from the date the tax was assessed. A sigh of relief? Not quite. 

Now, picture this: The IRS as a master chess player, always considering their next move. In certain cases, they can extend this 10-year period, or “re-file” the lien. Factors like an Offer in Compromise, bankruptcy, or a collection due process hearings can give the IRS additional time to collect.

But remember, these are not routine moves. Often, it’s less about the IRS being predatory and more about responding to specific circumstances. As always, understanding your rights and obligations is key. And while tax law may seem like a labyrinth, with the right guide and knowledge, you can navigate it confidently.

How long does an IRS lien last or stay in the public record?

In the thrilling roller coaster ride that is tax law, many find themselves on the edge of their seats, asking the question: “How long does an IRS lien last?” It’s a timeless question, born out of a fundamental curiosity and a genuine desire for financial peace.

Let’s flip the script. The answer, quite shockingly, is not eternity. Yes, despite popular belief, the IRS isn’t a relentless tax vampire that stalks you indefinitely. A Federal tax lien generally lasts 10 years. This timeline begins from the date the tax was assessed.

Picture a sand timer. The sand starts falling as soon as you receive that assessment, and the IRS has until the last grain falls to collect the debt. Once the 10 years are up, the lien generally evaporates, just like your tax worries.

But remember, this isn’t a game of hide and seek with the IRS. There are circumstances, like bankruptcy or appealing the lien, that can pause or extend the 10-year period. So, while the IRS might not have all the time in the world, they can occasionally hit the snooze button.

Understanding the life cycle of a tax lien is a significant step in mastering the art of financial self-defense. As your guide in this journey, I can assure you that knowledge is your most potent weapon.

What happens if you owe the IRS more than $25000?

There are few things as shocking as owing the IRS more than $25,000. This kind of debt can make you feel like you’re standing at the base of a financial Mount Everest, staring up at an impossible climb. 

When you owe such a sum, you’ve entered the IRS’s equivalent of the “major leagues.” But fear not—this is not a permanent state of doom. Despite the intimidating figure, you still have options, though they might not be what you’d expect. 

But owing this much can sometimes give you more room to negotiate. You can apply for an installment agreement to make tax payments, but there’s a twist. Instead of the streamlined process available for smaller debts and direct debit installment agreements, you’ll need to provide a full financial disclosure—kind of like airing your financial laundry. 

The IRS will analyze your income, expenses, assets, and potential for future income. Think of it as a thorough physical check-up, but for your finances. Based on this, they will establish a payment plan that you can feasibly manage, without having to sell your grandmother’s favorite silverware.

So yes, owing the IRS $25,000 or more can be daunting. But remember, it’s not the end of your financial journey. Rather, it’s a challenge to be navigated with the right strategy, advice, and a dash of optimism.

Can a tax lien hurt my credit report like Experian?

In the financial mystery thriller that is your credit report, a tax lien can often appear as a daunting villain in the public record. The question on everyone’s mind is: “Can a tax lien hurt my credit report?” This query is as common as a misunderstanding in a romantic comedy, and the answer might surprise you.

As of April 2018, tax liens no longer appear on your credit reports from the three major credit bureaus—Experian, Equifax, and TransUnion. Yes, you heard that right. It’s as if the scary villain has been written out of your credit report story. 

Even though the tax lien won’t show up on your credit report, it doesn’t mean it’s completely vanished from your life. It’s a bit like a vampire in daylight—less visible, but still very much existent. The IRS can still enforce the lien, which could result in serious financial consequences, like seizing your property or wages.

So, while your credit report might be safe from the scar of a tax lien, don’t let this lull you into a false sense of security. Just because it’s out of sight, doesn’t mean it should be out of mind. Keep your tax obligations in check, and you won’t have to fear the credit report boogeyman.

What is a federal tax lien?

Picture a financial thriller where you, the protagonist, receive a mysterious letter stamped with the seal of the IRS. Inside, the document cryptically announces that a federal tax lien has been filed against your assets. A chill runs down your spine. You wonder, “What is a federal tax lien?”

Cutting through the suspense, a federal tax lien is the U.S. government’s legal claim against your property when you neglect or fail to pay a tax debt. This lien safeguards the government’s interest in all your property—think your house, land, cars, and even your investment accounts. It’s as if the IRS has silently staked its claim, like an unnoticed shadow lingering on your possessions.

Here’s the plot twist: a federal tax lien exists after the IRS assesses your liability, sends you a bill explaining what you owe (Notice and Demand for Payment), and you neglect or refuse to fully pay the debt within ten days. It’s a classic three-step dance, choreographed by the IRS.

But don’t let the plot thicken with fear. Understanding the character of this federal tax lien is the first step to vanquishing it. And remember, even the most complex financial thriller can be solved with the right guidance and a good tax attorney by your side.