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If you’re having tax problems

Can I Dispute or Stop an IRS Tax Lien?

IRS tax lien removal

The IRS has placed a lien on your property or financial assets.  What is your next move? How do you handle this situation?  And, most importantly, can you dispute or stop a tax lien?

Finding out there is a tax lien on your property – whether real estate, personal property, or financial assets – is incredibly stressful.  An IRS tax lien is a serious matter and should not be taken lightly.  They will use every tactic in their book to get back the taxes, and each action will have a serious impact on your earnings and reputation.

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Key Insights:

  • What is a tax lien?
  • How to remove a tax lien
  • How long the lien remains after a settlement
  • Do you need an attorney?

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What is a tax lien?

A tax lien means that the government is placing a claim on your property until you pay the taxes owed.  Property claims can include any real estate, personal property, or financial assets you own.

Paying your tax debts in full is the best way to stop the IRS from filing a tax lien against you.  A lien is generally considered a seriously negative action from the IRS and can affect your credit score significantly.  All of the three major credit-reporting agencies will add tax liens to their consumer credit reports.  A lien can restrict the use of property if the debts are not cleared.  If you don’t want to face a situation like this, always keep tabs on IRS mailings and if you receive a notice, take prompt action by paying all of your tax debts in full, if possible.

There are several ways to “remove” a tax lien, including:

  • Release
  • Withdraw
  • Subordination
  • Discharge (Non-Attachment)

Withdrawal of the lien is the best way for it to be removed.  The withdrawn lien is treated like it was canceled as if it never happened.  It is not exactly removed but those records are treated as if to be disregarded.

Once the fact requirements are met, the process of Federal Tax Lien withdrawal begins by completing IRS Form 12277, Application for Withdrawal of Tax Lien.

The application form asks specific details about the lien.  It is very helpful to have a copy of the Federal Tax Lien notice when preparing the form.  However, that lien document is often not readily available.  A tax lawyer can usually arrange to recover that information directly from the IRS, maybe even receive a photocopy of the Form 668-Y.

How Long Does it Take?

The good news if you have a tax lien is that, once you reach a settlement or finish paying off your debt, the lien is quickly released.  In fact, the IRS releases your lien within 30 days after you have paid your tax debt or come to a settlement.  This allows you to return to normal to close to a month after you: either pay your tax debt in full ; or reach an agreement with the IRS

Will I Need an Attorney?

Tax problems are common.  However, you cannot simply wish them away.  You will have to face these issues head-on if you want to convince the IRS or state government to remove the lien it has placed on your property.

Tax issues are complicated, and the resolution process is overwhelming.  Many who find themselves struggling with tax debt also find that an attorney can make all the difference in resolving their issues quickly and with less stress than if they  attempted to handle the situation independently.

Getting liens removed under any of these methods generally requires filling out many forms and carefully navigating through the process.  A tax attorney can help you both before you have a tax debt issue and after the IRS has contacted you to resolve tax matters.

If you need help disputing or stopping a tax lien, call Ayar Law at 800.571.7175 to receive free, no-obligation tax advice from an experienced tax attorney.

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Executive Summary

  • Tax liens are placed on your personal property, real estate, or financial assets when you fall behind in paying your taxes
  • There are options available to dispute or remove a tax lien with the IRS
  • Once your taxes are paid or an agreement with the IRS is reached, the lien is removed within 30 days
  • Working with a tax attorney can help solve tax lien issues to let you return to normal life

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Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.