Your tax debt situation has spiraled out of control, to the point that the IRS has placed a lien on your account. This public document notifies creditors of the government’s legal rights to your property —and it makes it virtually impossible to secure outside loans or lines of credit.
The sooner you ditch your IRS lien, the better. Unfortunately, this can prove far easier said than done, as evidenced by the often complicated tactics detailed below:
Discharge
The Internal Revenue Code Section 6325(b) allows for the use of Certificates of Discharge in removing liens from specific property. This option primarily comes into play when selling property, as it enables new owners to take possession without worrying about liens.
Subordination, while similar to discharge, doesn’t result lien removal, but it can make it easier to deal with creditors and secure loans. A proactive approach is critical for both discharge and subordination efforts, especially as the discovery of a Notice of Federal Tax Lien could lead to significant delays when working with creditors.
Withdrawal
A Notice of Federal Tax Lien can be withdrawn in a variety of situations. Often, withdrawal occurs in response to mistakes made by the IRS in filing the lien in the first place. In other cases, withdrawal may serve as incentive for creating and following an installment plan.
In general, withdrawal involves abandoning the agency’s secured-creditor standing, thereby ensuring that it no longer competes with other creditors. This approach should not be confused with an actual release of the lien, which only occurs when the debt is paid off or if the time allowance for collecting on that liability expires.
Whether you’re looking to get an IRS lien removed or are desperate to prevent one from occurring in the first place, you can count on the team at the Highland Tax Group for guidance. Reach out today to get started.