If an IRS tax lien is hurting your credit, or stopping you from purchasing a house or car, the IRS offers a path to freedom. The IRS will withdraw the lien from public record in the following circumstances: 1. The amount you owe is under $25,000. But this is flexible - see #2, below. 2. Don't despair if you owe over $25,000 - the IRS calculates the $25,000 threshold not on your current balance, but what you originally owed when your tax return was filed. Because of interest and penalty accruals since the filing of the return, the amount you owe could be more than what you ... Read More
Is there property that a tax lien does not stop you from selling?
The general rule is that a Federal tax lien attaches to all of your property. But there are exceptions - known as "superpriorities" - situations in which you can sell your property even though the IRS has filed a tax lien against you. The tax code will allow you to sell your car to a buyer who does not know of the tax lien. And most buyers of cars would not have knowledge of a Federal tax lien against you because a tax lien is filed with your local county recorder or clerk of court - it is not noted on your car title, as would a bank loan. Your buyer's knowledge of the lien is ... Read More
Life after an IRS audit: What to expect next on the balance owed
Making it through an IRS audit is stressful and anxiety ridden, but for many, it is not the end of the road in dealing with the IRS. Many IRS audits result in balances due. Here are my responses to great questions from a reader about dealing with IRS collections after the audit. I just finished an audit covering three years ... 08-09-10...and owe the IRS over $100,000. My questions are: Will the IRS do a payment plan? Would they take a lump sum and forgive the balance? And will a lien be put on my property as part of the payment negotiations? To begin with, after the IRS concludes the ... Read More
Understanding Federal tax liens: How they work, when they expire and why they can be refiled
The Internal Revenue Code does not make it easy to understand how Federal tax liens work. Hopefully, that is what I am here for. The starting point to understanding your tax lien is to know that it lasts for the amount of time the IRS has to collect from you – 10 years. After the 10 year statute of limitations on collections expires, the IRS is required to release the lien. To accomplish this on a wide scale, the IRS inserts language into the lien that makes it “self-releasing.” That means it is automatically released when the 10 years is up. This “self-releasing” aspect of a tax ... Read More
Tax liens on real estate: Filed where I live or where my property is located?
Here is a situation from a reader showing why location counts when it comes to Federal tax lien filings: The IRS has filed a tax lien against me where I live in Hamilton County, Ohio. But I own real estate in North Carolina, and there are no tax liens filed against me there. Does the IRS have to file a lien in the county where I live or where I own property for it be effective? A federal tax lien is only effective against your property if it is filed in the proper place. If you own real estate, the IRS must file their Federal tax lien in the county where the real estate is ... Read More