After the Federal Tax Mortgage was filed, the next project tried to waive it. Last year about 950,000 liens were filed by the Internal Revenue Service. That number is expected to rise sharply. Most of the taxpayers are confused and have many wrong concepts about how to get Federal Tax Liens waived. Here are 10 golden tips that cover almost every avenue of getting the dreaded Federal Tax Lien released.
1. Make sure you actually owe the tax and the assessed tax is the correct amount. Don’t assume that what the IRS says you owe is true. Compare your tax records with actual IRS notices. If you don’t file your own tax return, the IRS may have filed a replacement return, the SFR. Generally, the IRS-rated amounts are much higher because they only give you a standard deduction. When this happens, complete the correct tax return and send it to:
IRS
ASFR Fresno Campus
Unit Stop 81304
PO Box 24015
Fresno, California 93779
This IRS unit processes tax returns that are now filed by taxpayers. In filing a new tax return, send a cover letter requesting a “review”. This can take up to 3-5 months, so be patient.
2. Pay taxes in full as soon as possible. This is the fastest way to release a Federal Tax Lien. If you pay by cashier’s check, the IRS will immediately release the Federal Tax Lien if you walk into your local office. Make sure you get a copy of the lien release and find out when the IRS will send a copy to your local courthouse. You will also want to check with a credit agent within 30 days to make sure they posted a satisfaction release on your credit report.
3. Make Offers in Compromise with Doubts of Collectability. Satisfy the terms of the Offer in Compromise and the IRS will release the Federal Tax Lien once the Offer is paid in full and all conditions are met.
4. Find out if the statute of limitations has expired in the tax year involved. The IRS has a period of 10 years during which they must collect taxes. The 10-year period begins when the IRS performs an assessment on the IRS computer. This is usually 6 weeks after the return is submitted. If the statutory period has expired, the lien is automatically released by law, but the release will not be sent by the IRS. You have to formally request a copy of the release from them. If you want a hard copy of the federal tax lien waiver after the law expires, fax your request to:
IRS Centralized Lien Release
Fax # 859-669-3805
5. Apply for surety bond. Bonds are very expensive, but the IRS will release the Federal Tax Lien once the bonds have been awarded to them. A bond is usually as much as the proceeds of a federal tax lien.
6. Don’t let a Federal Tax Lien be filed in the first place. When a Filing Intention Notice is sent to you, contact the IRS and request an audience. This would at least delay the possible filing of a Federal Tax Lien. You can give them a reason why they shouldn’t apply for a lien.
7. If there are special circumstances that will cause difficulties due to filing a Federal Tax Lien, let the IRS know the situation. Tough situations can change things in most cases. The IRS will give consideration to certain conditions.
8. Contact the Taxpayer’s Advocate Office if you believe there is something wrong with the filing and you want the IRS to look into the situation. Taxpayer Advocate Office is there for you. Go to IRS.gov for the nearest office.
9. If you realize that you made a mistake on your own tax return and the liability is incorrect, file an amended tax return so that the IRS can correct the issuance of a Federal Tax Lien.
10. Professional tax resolution company is your best choice to help you. A good tax resolution company with experienced professionals can solve this problem.
As a follow-up note, Federal Tax Lien is very damaging to your credit score. Most lenders will not lend in the presence of a Federal Tax Lien. Do your best to never file for a Federal Tax Lien.