By: Coleman Jackson, Attorney, Certified Public Accountant
January 29, 2020
When the Internal Revenue Service sends you a tax bill and you do not pay it, a federal tax lien is created by operation of law whether the IRS files the lien in the public property records in your state or not. A tax lien is merely an enforceable claim that attaches to your property and right to property. If the IRS files the lien in the public property records, they must under the law inform you of this action. This is done by a Notice of Federal Tax Lien.
A federal tax lien does not authorize the IRS is take your property. For this, the IRS must levy your property. A levy is a lawful process by which the taxing authority can take your property or right to property without the necessity to obtain a court order. Don’t get confused between a lien (notice of tax debt) and a levy (taking of your property). Taxpayers have a right to appeal both actions in the Office of Appeals and possibly to the U.S. Tax Court if their challenge is timely.For now, the question in this blog is how do you get rid of an IRS tax lien?
Taxpayers can get rid of an IRS tax lien! If the tax debt has paid in full, the taxpayer can get rid of the tax lien by seeking a release of the lien. This is typically an automatic process; but if it’s not, request a release of the lien. Taxpayers can seek exemption of certain property from the lien. This is typically done to facilitate the sale or financing of real property or business property with an attached federal tax lien. Taxpayers can post a bond and ask that the lien be released. Taxpayers can get rid of a tax lien by filing a challenge in the Office of Appeals as to procedural issues since the IRS must comply with exacting legal rules with respect to filing federal tax liens. Perfecting an IRS tax lien like any lien is a matter of state law which varies from state to state. In Texas property law varies from county to county. This simply means that the IRS must comply with each counties law when filing liens in the county property records. There are 254 counties in Texas. In addition to any procedural issues,taxpayers can also get rid of a federal lien by challenging it on substantive legal grounds. Finally, taxpayers can get rid of an IRS tax lien if the ten-year collections statute has expired unless the collection statute has been extended or suspended by bankruptcy proceedings or for other reasons. The release of the tax lien is automatic on the expiry of the ten-year collection statute. This is merely a summary of how to get rid of a tax lien; in law, there are a lot of twist and turns depending upon all the facts and circumstances.
This law blog is written by the Taxation | Litigation | Immigration Law Firm of Coleman Jackson, P.C. for educational purposes; it does not create an attorney-client relationship between this law firm and its reader. You should consult with legal counsel in your geographical area with respect to any legal issues impacting you, your family or business.
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