4 Strategies to Handle IRS Tax Lien Issues

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If you fail to pay your taxes, the IRS can legally file an IRS Tax Lien.

Generally, here’s how this scenario plays out. First, the agency determines that you owe taxes and mails you a bill with the amount due. Next, you fail to pay the amount owed. As a result, the agency places an IRS Tax Lien on your property. If you find yourself in this compromised, fraught position, the good news is that you are not helpless. Below are several powerful options to respond strategically to a federal tax lien on your home or property.

Option #1. Pay Your Tax Bill in Full

Once you satisfy your tax debt, the IRS will release the IRS Tax Lien against your property within 30 days.

Option #2. Request a Discharge for the Property

The discharge takes the IRS Tax Lien off the named property. You will need to review the specific eligibility information and fill out the required IRS forms to request the discharge. Advisory personnel at the IRS will need to review and confirm the information in the application before signing the discharge.

Option #3. Request Subordination on the Property

While subordination does not withdraw the IRS Tax Lien, other creditors will take priority over the IRS, which means that you can more easily obtain a mortgage on the property. As with a discharge, you will need to qualify for subordination via a relatively involved process.

Option #4. Request a Withdrawal of the IRS Tax Lien

While a discharge completely removes the IRS Tax lien from the property, so that you (the property owner) no longer face any tax liability, you will still need to pay the amount you owe if the IRS approves a withdrawal. The IRS will withdraw the Lien if you have paid your taxes. However, you might also qualify for lien withdrawal if you meet all of the following requirements:

  • You have entered a Direct Debit installment agreement with $25,000 in debt or less
  • You can pay the full amount within 60 months or prior to the expiration of the Collection Statute
  • You have fully complied with all other payment and filing requirements
  • You have made three payments on your loan and
  • You have no previous defaults on your installment agreement.

If you’re in trouble with the IRS, and you face consequences due to an IRS Tax Lien, contact our qualified Denver tax professionals immediately to discuss what can be done to resolve the matter and give you back peace of mind. To speak with a professional tax advisor now, call our office at 720-398-6088.