Hit without Warning: Liens are often issued without warning. And there’s a big problem with that. Why? Because it’s illegal! If you do not receive a notification in the mail before a lien issued to you, read on. See if you are eligible to remove the Lien.
Claim Letter: Before the IRS can issue a Lien, they are required to send a notice (“Notice and Request for Payment”) and give you the opportunity to appeal before the Lien is issued. If they don’t do this, the lien is invalid. Believe it or not, the IRS often fails to send the right notifications, or send them to the wrong address.
Know Your Rights: The Act contains useful tools to waive Tax Liens. This is known as “Lien Withdrawal”, and you may qualify for it. There are four possible reasons to withdraw Lien:
- The lien was filed too early or violated IRS procedures.
- You are signing an Installment Agreement that does not specifically provide a Lien.
- Withdrawing a lien will facilitate tax collection.
- A Taxpayer’s Advocate determines that the withdrawal of the lien will be in the best interest of you and the IRS.
Oppose! If any of the above applies to you, it’s important that you act quickly to save on your credit. You must send a detailed letter to the IRS before they remove the lien. There are no preprinted forms for you to fill out. IRS publication 784, “Application for Subordination of Federal Tax Lien” lists all the information you need to include in your letter. But read carefully! One mistake and your lien can be permanent.
Watch Your Back: Did the IRS agree to withdraw the Lien? This has not been completed. First, make sure the IRS gives you a copy of the notice that the lien has been released. The IRS must also notify credit reporting agencies and creditors that a levy has been withdrawn. This helps repair the damage done by the Lien. But that yours duty to provide the names and addresses of those you wish to notify, so make sure you cover your base.
Now You Have a Smoking Gun… Use it!