The filing of a federal tax lien is an effective tax collection tool for the IRS. These liens are public record and are typically filed with the county clerk which causes them to then be picked up by the credit report. They can be embarrassing of course, but worse they can make it very difficult to obtain financing, sell property, or even to get a job.
Fortunately, there are options. The IRS lien can be legally released, discharged, subordinated or withdrawn.
Video: Mesa AZ Tax Attorney Michael Anderson Explains Tax Liens
and it’s good to understand a couple of things about tax liens.
The Lien release typically occurs after the tax debt has been:
- Paid in full
- Fully settled via the offer in compromise process
- Self released after the statute of limitations has run out, or;
- Released after a bankruptcy discharges the underlying tax debt and if no asset is subject to the lien
A certificate of discharge of the lien is available when the taxpayer is selling real property. The agreement to discharge the lien is only granted if the equity from the sale goes to the IRS.
An IRS lien subordination will be granted if the taxpayer is re financing real property. The IRS will agree to allow the new lender superior lien placement for purposes of the refinance only.
The withdrawal of the tax lien can be forced where the IRS lien was filed incorrectly, inappropriately or where the withdrawal may facilitate the collection of the tax. It can also be withdrawn where your tax debt amount is below certain limits.