Unpaid taxes can lead to several serious consequences, including Internal Revenue Service tax liens that establish a claim against any property you own. While your property is subject to an IRS tax lien, you can sell it, but the IRS can claim your profits and apply them to your tax debt. Since they show up on your credit report, liens can also cause you to be denied new credit, apartment rentals, and other financial situations. 

You must take care of your tax debts quickly or get help from a tax professional if you can’t. And there are times when the IRS makes mistakes. If this should happen to you, there are ways to appeal the lien and have it removed. Keep in mind that we are covering federal tax liens, your state tax agency can also apply state tax liens when trying to collect back taxes owed to the state. 

What is an IRS Tax Lien on Back Taxes?

Tax liens protect the government interest in your real estate, personal property, and other financial assets. The Notice of Federal Tax Lien puts all creditors on notice that the government has the first legal claim to your property. These liens are then made a public record when sent to local government agencies. This blog post covers federal tax liens, but state tax authorities can also place a lien on your property.

How Long are Tax Liens Valid?

There are several ways to appeal or remove your tax lien. Once you’ve received a Notice and Demand for payment, you are on notice that a lien has been filed. Minimally IRS tax liens last for ten years. But they can continue after this time if:

  • An installment agreement has been set up, extending the statute of limitations.
  • A taxpayer files an Offer in Compromise. This agreement is used to release federal tax levies when an agreement has for payment has been made that is less than the original amount due.
  • The IRS refiles your lien within the allotted time of refiling.

Section 6503 of the Internal Revenue Code also suspends the collection period when:

  • A notice of deficiency has been issued
  • Assets have been seized
  • The taxpayer lives outside of the US for six months or more
  • A taxpayer’s property has been wrongfully seized, or a lien has been placed when it shouldn’t have been
  • A taxpayer files for bankruptcy

Ways to Find Relief From Liens

The following options are only available depending upon a taxpayer’s financial situation, how much they owe the IRS, and other circumstances. You could find relief through:

A release – if you can make a one lump sum payment, pay off your tax debt following an installment agreement, or successfully negotiate an Offer in Compromise, the lien can be released before the expiration of the statute of limitations.

Withdrawal: While it’s difficult under these grounds, it is possible to have the lien removed if it were improperly filed, if a Direct Debit Installment Agreement has been entered into, or showing that removal of the lien will help the taxpayer pay the debt.

Discharge: It is also possible to discharge individual assets from the lien, allowing a taxpayer to sell the property without interference.

Subordination: Rarely, the Internal Revenue Service will allow other creditors to subordinate or move ahead of, the tax debt.

How do I Request a Withdrawal of an IRS Tax Lien?

A formal request must be submitted to the Internal Revenue Service using Form 12277, an Application for Withdrawal of Filed Form 668 (y). You will then receive a Form 10916{c}, allowing the lien to be cleared.

How Do I Remove a Tax Lien from My Credit Report

When the Internal Revenue Service removes the lien, you’ll then have to contact all three credit agencies to ensure that your credit reports have been updated. When you receive the Notification of Withdrawal or Release, get a copy of your credit report at Annual Credit Report.com and find out if it is showing on your credit report. If it shows, you will have to contact each agency to dispute it. Each agency will verify the withdrawal or release to get confirmation. They will then let you know if the lien has been removed.

How Can I Avoid Getting a Property Tax Lien?

The only way to ensure you avoid an IRS lien is to pay your taxes! File and pay your taxes before the IRS files the tax lien. If you cannot manage to pay your taxes:

  • Don’t ignore IRS notices or letters.
  • Keep a record of your status with the IRS in a safe place
  • Respond right away to show that you aren’t trying to avoid them
  • Set up a payment installment agreement with the IRS and make all of the payments
  • Work with a professional tax relief firm to help you work with the IRS

Can a Tax Lien be Removed?

IRS Tax Liens if there were mistakes that were made. We can help you file an appeal and get you relief if:

  • You’ve already paid your bill
  • A lied was filed by mistake
  • Proper procedures were not filed
  • You are not responsible for the debt, but your spouse or ex-spouse is.
  • You are ready to get into the Fresh Start program.
  • The ten-year statute of limitations has run out for collecting the tax debt.

When you receive your lien notice, look for the option to request a Collection Due Process Hearing with the Office of Appeals. This appeal must be submitted within 30 days after the 5th date of filing or by the date indicated on your notice. Call the IRS Tax Relief Network for assistance if you receive one of these letters.

Get Help From the IRS Tax Relief Network Today!

Has a lien been improperly filed? Has an IRS tax lien been filed against you, or is this on the horizon? Contact us today to discuss your case. 

We can schedule your free consultation with our tax professionals to learn about all of our services. Our tax relief experts can help you negotiate and settle your debt without leaving the house. We are waiting for your call at 877-TAX-MEND.