Federal Tax Lien

Federal Tax Lien

If you have received a notice from the IRS, telling you that they have filed a Federal Tax Lien against you, CONTACT US today. If you don't protect your assets, the IRS may take them from you. That includes money in the bank, Bank Levies, your car and other property Asset Seizures, your paycheck Wage Levies, and other property you own or have right to such as your home and your retirement. Don't let this happen to you. We can help.

The IRS will file a Notice of Federal Tax Lien with the County Clerk in your area. This is public notice that you owe taxes. Additionally, the Notice reads, "There is a lien in favor of the United States on all property and rights to property belonging to this taxpayer for the amount of these taxes, and additional penalties, interest and costs that may accrue". The filing of the Notice can give you a major financial headache, and can cause problems such as making it more difficult to obtain credit.

If you don't pay the IRS what you owe in back taxes or file an Offer In Compromise, you will have little success in getting a release of this lien. If you decide to file an Offer in Compromise, we can help. If you don't qualify for an Offer, we can help you set up an Installment Agreement to pay your taxes over a period of time, or you may qualify as Currently Not Collectible. Contact Us for a free analysis.

The IRS recently revised their procedures for filing a Tax Lien with their fresh start program. Under the new program, they have increased the lien filing threshold from $5,000 to $10,000. However, Liens may still be filed on amount less than $10,000 when circumstances warrant.

Adjustments to IRS Lien Policies

Increase in the Lien filing threshold

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. 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 If you wish to have the Notice of Federal Tax Lien withdrawn, you must request the withdrawal in writing.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 (Form 1040 tax)
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
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. To convert a regular installment agreement to a Direct Debit Installment Agreement::

Individuals may use the Online Payment Agreement application, call the toll free line listed below, or visit your local IRS office
Businesses may call the toll free line listed below or visit your local IRS office

We can help you set up an Installment Agreement to pay you taxes over a period of time, help you request an Offer in Compromise, or possibly you may qualify as Currently Not Collectible.