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By Michael S. Anderson of Anderson Tax Law logo for Arizona tax attorney Michael S. Anderson P.C.
  • IRS Lien Withdrawal – The $25,000.00 Rule

    IRS Lien Withdrawal – Get to $25,000.00 and it can happen

    IRS Lien Withdrawal - The $25,000.00 RuleThe IRS Tax Lien hurts your credit.  It really does, and everyone is afraid of it as a result.  There are a few ways to get rid of it though or even avoid it in the first place for that matter.  Read more here

    This Blog Post is only about one thing.  Your ability to have the IRS withdraw a Notice of Federal Tax Lien if your debt is $25,000.00 or less.

    So…a few things about this that are important to understand:

    1.  The $25,000.00 amount isn’t calculated or at least it shouldn’t be calculated based on what you currently owe.  It is based on the original amount that was owed (including any portion of penalty and interest assessed back then) when the return was filed.  Your current debt is likely much higher than the original amount as a result of penalty and interest.

    2.  You have to be able financially to pay the debt within 5 years OR the remaining period left in the statute of limitations on collection, whichever is shorter.  The payments you make need to made by direct debit from your account.

    3.  You can’t ask the IRS to withdraw the Lien until you have made at least three payments via the Direct Debit Installment Plan you set up.

    4.  If you qualify to do this, you don’t have to provide the IRS any financial information.  No work info, no property info, nothing but the account and routing numbers for the bank account you are going to use for direct debit.

    5.  You can pay down the debt to $25,000.00 in order to qualify for this type of Lien withdrawal.  If you have $28,000.00 intotal tax debt and the original assessed balance is still $26,000.00, you would need at least $1000.00 in order to get to the $25,000.00 threshold and then you could pay the $28,000.00 over 72 months if directly debited or the length of time remaining in the statute period, whichever is shorter.

    6.  If you are in a IRS payment plan, and the debt is paid down to $25,000.00 as a result, you can convert the payment plan to a Direct Debit Plan for this purpose.

    7.  If you are in an IRS payment plan and the original debt was less than $25,000.00 you should consider converting to the Direct Debit Plan.

    8.  The Baby Elephant doesn’t really have anything to do with this.

    Michael Anderson, Tax Lawyer In ArizonaWritten By:

    Anderson Tax Law
    2158 N. Gilbert Rd. Ste 101
    Mesa, Arizona 85203

    Phone: (480) 507-5985
    Fax: (480) 507-5988
    Email: [email protected]