IRS tax debt

How to Get Rid of the Federal Tax Lien for Good

There are a lot of people that owe tax debt to the IRS. Recently a spokesperson from the IRS stated that an estimated 8.2 million Americans owed back taxes. That’s a lot of people. Most of these people owe a minimal amount and don’t qualify for a settlement of any kind with the IRS. However, what a lot of these 8.2 million have in common can be found on their credit report. Normally accompanying tax debt is a tax lien, and this shows its ugly head on a credit report, glaring at lenders, landlords, and credit companies. So what can be done?

First, how to qualify to have your lien removed at the IRS

In order to qualify to have a tax lien removed, your balance must be paid in full, through a settlement or in full payment, or you must be in a streamlined payment plan. There are of course ways around a lien temporarily, but the focus of this article is to get it removed completely from your credit report. If you paid the balance in full, then of course the lien is eligible as there is nothing to back the lien on. If you have reached a settlement with the IRS and that settlement has been finalized and paid in full, then there is no debt remaining and therefore once again you can have the lien removed. If you owe less than $50,000 to the IRS, you can qualify for a streamlined fresh start payment plan and are protected from new liens filed and are also eligible to have your past lien removed after proof of successful payments. Therefore, in order to get the lien removed, the debt must be paid in full or you must be on the right type of payment plan.

Make the right request

While the law says that the release will automatically happen, this is not often the case. What is necessary sometimes is a request in writing to the IRS. You will want to make a request to have the release of tax lien form. Once you obtain this form, this only “releases” the lien, but it will still show on your report. Thus, the next step is normally the most important. You have to request to the IRS to “withdrawal” the tax lien. Prepare a cover letter, the right form, attach all necessary documentation, and even include some IRS publications to help guide them.

You received the Withdrawal letter, now what?

Now you have taken all necessary steps to get the balance situated, the lien removed, and the lien withdrawn. However, it is still showing up on your credit report as “removed”. It can take up to seven years to get this removed through the normal process, so you should take steps to expedite the process. Contact the three credit bureaus, dispute the lien, and provided a copy of IRS communications to make the argument that to have it deleted from your report, NOT show “removed.” Credit agencies will verify the information with the counties the lien is filed with and then should remove from credit report within 60 days.

Sounds easy enough….not really…

There are a lot of moving parts and a lot of agencies that you’ll be dealing with. There are a lot of forms to organize and complete, and some legal drafting on your request/demand letters. Even when a professional takes control, it can be removed on 2 credit agencies and not all 3 and therefore more work is needed. Luckily, we here at Tax Debt Services have had the experience in making these arguments for our clients and are familiar with the language, forms, and processes of removing a tax lien. Call 619-352-4188 to see if we can help get your credit report free from tax liens.


It’s Not My Debt, it’s my Ex’s

A common question that many of our prospects ask us is what to do in the situation where the IRS is threatening collections against you for tax debt that accrued while married? Many of these people state that they had no idea that there was a tax debt issue, their previous spouse always prepared their returns and did the finances of the house, and now they feel anxious and fearful of IRS collections even though they were in the dark the whole time.

The answer to these similar questions comes in the form of an Innocent Spouse relief. The IRS has created a category of debtors who owe tax debt as a joint couple, but where one spouse is not liable based upon the facts of the situation and an equitable argument. There are many subcategories and different criteria to be met under the banner of the Innocent Spouse, but if you do qualify for this type of relief, the tax debt is removed from your name and social. That means that instead of you owing the debt, the whole balance is transferred to the liable spouse.

How do you know if you qualify?

As is stated above, there are many subcategories and criteria to be met in each to see if you do qualify for relief, but some good indicators are as follows:
– You are now divorced, widowed, or legally separated
– You did not handle much of the finances of the home
– You were minimally involved in the preparation of tax returns
– You were unaware of any extra sources of income your ex was making
– You were unaware of any tax debt issues
– You did not receive notice from the IRS of tax issues until recently

If some, or all of these criteria are met, you may qualify for relief under the banner of Innocent Spouse.

I think I may qualify, now what?

If you believe any of the following may sound like you, the best step is to speak to a professional for them to hear your story, make a determination of what your options are, and then seek the relief. Many tax resolution companies do not look for this during initial conversations, so be sure to seek a company that is looking to listen to you and your story, not just interested in earning a profit. Contact us at 619-352-4188 and let our professionals get to work for you.