Tax Lien Withdrawal
A tax lien withdrawal removes the public Notice of Federal Tax Lien against your property. The withdrawal assures that the IRS is not competing with other creditors for your property. A tax lien withdrawal, however, does not remove your liability for paying taxes due.
Federal Tax Lien
A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The government can put a lien on your real estate, personal property, and financial assets.
The IRS can initiate a federal tax lien only after:
- They assess your liability and put your balance on the books.
- They send you a Notice and Demand for Payment that explains how much you owe; and
- You neglect or refuse to pay the debt in full and on time.
Once all the criteria are met, the IRS issues a Notice of Federal Tax Lien, a public document alerting creditors that the government has a legal right to your property. Refer to Publication 594, The IRS Collection Process, for more information.
How a Tax Lien Can Affect You
A tax lien can affect all aspects of your life and business, as follows:
- It is attached to all of your assets, such as property, securities, vehicles, and any future assets acquired during the duration of the lien.
- It limits your ability to get credit.
- It restricts travel outside the country.
- It makes it difficult to sell or refinance your home
- It cannot be discharged in most cases as part of a bankruptcy.
- It is attached to all business property and all rights to business property, including accounts receivable.
How You Can Avoid A Tax Lien
You can avoid a tax lien by simply paying your taxes in full and on time. If you cannot file or pay on time, the IRS offers payment options to help you settle your tax debt over time.
Difference Between a Tax Lien and a Tax Levy
A tax lien secures the government’s interest in your property when you don’t pay your tax debt. A levy allows the government to take the property to pay the tax debt.
How to Request A Tax Lien Withdrawal
Tax Lien Withdrawal
The IRS may grant a tax lien withdrawal under the following circumstances:
- The IRS paperwork wasn’t in order before they filed the notice.
- The taxpayer is paying the lien in installments. The type of repayment plan, such as the Direct Debit Installment Agreement, may allow the IRS to withdraw the lien notice.
- The IRS may withdraw the lien notice if it makes it easier for the taxpayer to pay the tax debt or if it makes it easier for the IRS to collect it.
- The lien and lien notice have already been released.
Eligibility for the Direct Debit Installment Agreement
Under the Fresh Start Initiative, taxpayers may have their Notice of Federal Tax Lien withdrawn if they have entered or converted their regular installment agreement to a Direct Debit Installment Agreement. Eligibility requirements include:
- You are a qualifying taxpayer (e.g., individuals, businesses with income tax liability only, and out of business entities with any type of tax debt)
- You owe $25,000 or less (If you owe more than $25,000, you may pay down the balance to $25,000 before requesting withdrawal of the Notice of Federal Tax Lien)
- Your Direct Debit Installment Agreement must fully pay the amount you owe within 60 months or before the Collection Statute expires, whichever is earlier
- You are in full compliance with other filing and payment requirements
- You have made three consecutive direct debit payments
- You can’t have defaulted on your current or any previous, Direct Debit Installment agreement.
How Rockwater Associates Can Help
Rockwater Associates has successfully helped thousands of people just like you overcome tax debt, small or large. With decades of experience working with the IRS and every State, we are your best hope of reaching a better deal. Almost everything is negotiable, including back taxes.
If you choose to partner with Rockwater Associates, you will be working with some of the industry’s brightest and most experienced professionals. Our communication, honesty, and transparency in our processes make us the right choice to provide a solution to your tax lien problem. Our number one priority is providing you with a great customer experience.
Our tax professionals at Rockwater Associates have successfully helped many individuals and small businesses resolve their tax lien concerns, including tax lien withdrawals.