If you can’t pay your tax debt in full, you may still have options for avoiding an IRS tax lien. The IRS allows certain taxpayers to receive a lien withdrawal, lien discharge, or lien subordination.
Key Insights We Will Discuss:
- The main ways to get relief from IRS tax liens.
- Who qualifies for tax lien relief.
- Reasons you may need to avoid an IRS tax lien.
Tax Lien Avoidance Strategies
There are three main ways to get around an IRS tax lien:
- A lien withdrawal completely eliminates the IRS Notice of Federal Tax Lien
- A lien discharge removes the lien from one piece of property
- A lien subordination gives another creditor a senior lien position for a specific piece of property
Each option has its pros and cons. A lien withdrawal is the most comprehensive solution, but it may not be granted as freely as a lien discharge or subordination.
Keep in mind that if a lien is withdrawn, you are still responsible for paying your tax debt, and a failure to do so could result in tax levies and other consequences.
Who Can Request Tax Lien Relief
Assuming the IRS followed the proper procedures when filing a tax lien, your best options when requesting a lien withdrawal are to enter into a Direct Debit Installment Agreement (DDIA) or show that the withdrawal will facilitate tax collection. If you use a DDIA, you’ll need to pay your balance below $25,000 and meet other requirements before you request a lien withdrawal.
Lien discharges and subordinations are typically granted when the taxpayer pays the IRS an amount equal to the lien interest being sacrificed, or when the taxpayer has so much property subject to the federal tax lien that the IRS can feel comfortable discharging or subordinating its lien for one asset.
Reasons to Seek Lien Relief
Tax liens will appear on your credit reports from the major credit bureaus. This can make it difficult to secure a loan or line of credit. And you can say goodbye to any rental agreements. You may even be turned down for certain types of jobs. A tax lien may also show up if someone searches certain public records, such as your county‘ s real property records. This can make it very difficult to sell your property.
You may also want to seek relief from a tax lien if you are trying to sell, refinance, or borrow against your property. The IRS will generally consider these requests as long as you prove to them that it is also in their best interest.
Contact an Attorney
To get help with IRS tax liens, call Ayar Law at 800-571-7175 to receive FREE, no-obligation tax advice.
- There are several methods of getting around an IRS tax lien
- There are a variety of ways to qualify for tax lien relief
- You should seek tax lien relief if you want to sell, refinance, or borrow against an asset subject to the federal tax lien
- For help with a lien, contact Ayar Law and speak to one of our seasoned attorneys. We offer free, no-obligation tax advice and would love to fight for you! 800-571-7175