How to Release IRS Tax Liens?
What is A Tax Lien?
IRS Collectors have a powerful arsenal of collection methods. Although it seems like a routine administrative exercise, a tax lien is one of the most potent collection weapons, especially when the taxpayer owns real estate or other significant assets. Unlike a levy or a wage garnishment, a tax lien does not immediately seize any assets, but its consequences may be more armful and last for many years. A Lien grants the tax agency a legal claim to the debtor’s assets as security for tax debt.
How Does IRS File A Tax Lien?
A federal tax lien automatically arises once the tax debt is assessed and the IRS demands the payment. Although a “secret lien” will automatically arise, the IRS must file a Notice of Federal Tax Lien to inform the world about the tax debt and establish its place among other creditors. After a few simple procedural hoops, the government files a tax lien to protect its interests. Recorded with one or several county recorders, a lien publicly discloses that you owe back taxes.
Why Do Tax Liens Matter?
Recording of the lien will negatively affect the taxpayer’s credit and even employment opportunities or business ventures. Lien makes it very difficult to obtain credit or sell real estate. Liens may also jeopardize future employment, especially with specific government clearances, licenses, or jobs in the financial or public sectors.
How To Resolve A Tax Lien
Although the taxing agencies are extremely reluctant to release or modify IRS liens, TaxHelpers may get the government to subordinate its lien to a lender, thus allowing the client to borrow money against his assets to satisfy all or part of the tax debt. Furthermore, if an asset has no equity, a lien may be removed or lowered (as in short sales and family transfers). Our tax lawyers also ensure the tax agencies have met all legal requirements for a valid tax lien filing. If any procedural defects or numerical errors are discovered, our tax attorneys immediately appeal the tax lien filing.
The taxpayer may also get tax lien relief through a tax settlement, audit reconsideration, or tax-motivated bankruptcy.
Releasing a Lien generally requires coming to some repayment agreement with the IRS. However, the IRS won’t release a Tax Lien simply because you ask them to, and most of the time, professional assistance is required to argue on the taxpayer’s behalf and prove that he or she is serious about settling the debt.
If you have received a Notice of Federal Tax Lien, the IRS is seriously pursuing enforcement of your debt, and you cannot afford to put it off any longer. If you’ve reached this point, we highly recommend consulting with a tax attorney to see your options.
What Is Lien Subordination?
Lien Subordination allows the debtor to borrow funds against an asset and pay off part or all of the tax debt. If taxes are not paid in full, a lien in favor of the United States arises upon all property and rights to property, whether real or personal, tangible or intangible, belonging to the taxpayer. Even if the taxpayer makes a partial payment, a tax lien will arise for the tax balance. As you can see, the lenders will be reluctant to lend money against an asset after the lien is filed because the IRS would have a superior position. The IRS may subordinate its interest if the taxpayer wants to borrow and pay off part or all of the tax debt. The IRS is taking a back seat and allowing other lenders priority against the assets. The IRS may agree to the subordination if the tax debt is partially or fully satisfied and/or in the government’s best interest.
Subordination is generally a tedious and time-consuming project, requiring extensive loan details and other documentation.