IRS Tax Liens
IRS tax liens are a subject we are very familiar with here at Arizona Tax Liens.com. In order to answer as many of these IRS tax lien questions as possible, we have created this detailed IRS tax lien information web page. Please review it and let us know if you happen to have any other questions on the subject.
IRS Tax Lien Information:
IRS tax liens give the United States government a legal claim to your real property as payment or security for your tax debt. An IRS Tax Lien Notice may only be filed after:
- The IRS sends you a Notice and Demand for Payment, which is a bill that tells you how much you owe in back taxes;
- The IRS assesses the tax lien liability on your property; and
- You refuse or neglect to pay the tax lien debt in full within ten days after the IRS notifies you.
Once all of these IRS tax lien requirements are met, an IRS tax lien is created for the amount of the taxes you owe. By filing notice of this tax lien, your creditors are publicly notified that the IRS has a claim against your property, including any real property that you acquire after the IRS tax lien is filed. This notice is used by the courts to basically establish priority in many situations, such as in bankruptcy proceedings or any sales of real estate, such as Arizona real estate.
This IRS tax lien attaches to all your personal property (like your house or car) and to all your rights to property (like your accounts receivable, if you happen to be a business).
You Must Use Caution!
How to Releasing a IRS Tax Lien
After an IRS tax lien is filed in the courts, your personal or business credit rating most likely will be harmed. Once it's damaged, you may not be able to get a loan to buy a new car or a new or used house, sign a rental agreement or get any new credit cards. That's why it is extremely important that you work to resolve your tax lien liability very quickly, hopefully before any IRS tax lien filings become necessary.
You can expect the IRS to issue a Release of the Notice of IRS Tax Lien within:
- Thirty days after you pay all of the IRS tax due or by having it adjusted, or
- Thirty days after the IRS accepts a bond that you have submitted, guaranteeing payment of your tax lien.
You will also be required to pay all fees that a state, such as Florida or Arizona, or other jurisdiction charges to file and release the IRS tax lien. These fees (which can be expensive) will be added to the total amount of back taxes you owe.
After 10 years, the IRS tax lien will be assessed, and the lien releases automatically if the IRS has not filed it a second time. If the IRS negligently or knowingly does not release a Notice of IRS Tax Lien when it should have, you may sue the IRS, but not any IRS employees, for damages you may have experienced.
Your IRS Tax Lien Payoff Amount
The amount of the IRS tax lien will remain a matter of public record for as long as it is outstanding, including all accruals and additions. Please keep in mind that at any time, you may request an updated IRS tax lien payoff amount, in order to see the remaining balance due, by calling the toll-free customer service telephone number for the IRS at 1-800-913-6050. An IRS employee will issue you a detailed letter with the current amount that you owe and must pay before they will release the Notice of IRS Tax Lien. It's not easy, but necessary.
How to Request a Discharge of an IRS Tax Lien
Let's say you are giving up ownership of some personal property, such as when you sell your commercial property or home, you may request an IRS Tax Lien Certificate of Discharge. Each application you request for a discharge of an IRS tax lien releases the effects of the lien against only 1 piece of your personal property. Please note that when certain conditions exist, a third party may also request an IRS Tax Lien Certificate of Discharge. If you're selling your home (aka primary residence), you may apply for a taxpayer relocation expense allowance. Remember though that certain conditions and limitations apply, as always.
How to make the IRS Tax Lien Secondary to Another Lien
In most cases, an IRS tax lien can be made secondary to almost any other lien, such as an Arizona Tax Lien. That specific process is known as subordination.
How to Withdraw an IRS Tax Lien
According to Federal law, a filed notice of an IRS tax lien can only be withdrawn if:
- You entered into an installment agreement (payment plan) to pay the tax lien debt on the notice of lien (unless the agreement provides something else),
- The IRS tax lien notice was filed too soon and/or not according to all IRS procedures,
- Withdrawal will speed up collecting the IRS tax, or
- Withdrawal would be in the best interest of you (as determined by a Taxpayer Advocate), and in the best interest of the United States government.
The IRS will also give you a copy of the IRS tax lien withdrawal, and if you write to them, the IRS will send a copy to any other institutions you name.
What are the IRS Tax Lien Inquiries
If you happen to have any questions regarding IRS tax lien inquiries, such as tax lien releases and tax lien payoff amounts, please contact the Lien Unit by calling them toll free at 1-800-913-6050.
If you are ever faced with a complex IRS tax lien issue, please consider contacting the Collection Technical Services (TS) Advisory department. TS Advisory is a collection compliance function that helps taxpayers on really complex lien issues, such as IRS Tax Lien Certificate of Discharge issues, Subordination issues, Subrogation issues, Non-Attachment issues, Withdrawal issues and pretty much all other complex lien issues.
How to Appeal the Filing of an IRS Tax Lien
United States law requires the IRS to notify you in writing no more than five business days after the filing of any IRS tax liens. They may give you this tax lien notice in person, leave it at your home or your work, or send it to you by certified or registered mail to your last known personal address. You can always ask an IRS manager to review your case, and you may also request a Collection Due Process hearing with the Office of Appeals by filing a request for a hearing with the listed office on your IRS tax lien notice. Please remember that you must always file your request by the date shown on your IRS tax lien notice. Here are some of the issues that you may discuss with the IRS:
- The IRS assessed the tax and filed the IRS tax lien when you were in bankruptcy, and subject to the automatic stay during bankruptcy,
- You paid all taxes owed before the IRS filed the tax lien,
- You did not have an opportunity to dispute the assessed tax lien liability,
- The IRS made a procedural, yet important, error in your assessment,
- The time to collect the IRS tax lien (known as the statute of limitations) expired before the IRS filed the lien,
- You wish to make a spousal defense, or
- You wish to discuss your IRS tax lien collection options.
At the end of your Collection Due Process hearing, the IRS Office of Appeals will issue an IRS tax lien determination. Believe it or not, that tax lien determination may support the continued existence of the filed IRS tax lien or it may determine that the IRS tax lien should be completely withdrawn or released. If you disagree with any part of the Appeal's determination, there is a thirty day grace period starting with the date of determination, in which you may request a judicial review in a court of proper jurisdiction. It's not an easy process, but if you are a tax lien investor, tax liens can be a great investment tool.
If you have any other IRS Tax Lien questions, be sure to check our Frequently Asked Questions section and learn more at Government Tax Lien.