IRS Notice of Federal Tax Lien- Everything you need to know about Tax Liens, the IRS's Silent Killer

NOTICE OF FEDERAL TAX LIEN: If you got the "Notice of Federal Tax Lien" letter in the mail, questions are whizzing through your mind. "Will this affect my credit?" and "Can I get the Lien removed?" are just a couple that I'll cover.

Will the Notice of Federal Tax Lien affect my credit?
Yes. That's because the Notice of Federal Tax Lien is really a document that notifies your creditors about your IRS Tax Debt. It can devastate your credit report.

"I owe the IRS. What can I do to prevent them from filing a Tax Lien?"
The Tax Lien may exist before you know your Tax Debt exists! If you do not pay your debt in full or make an agreement with the IRS within ten days of the IRS sending the "Notice and Demand for Payment" to the last known address they have on file for you, the IRS will automatically place a tax lien on you. The best thing you can do to prevent a tax lien is to enter into an Installment Agreement or pay your debt in full, as soon as you know you are going to owe.

But a Tax Lien is an Enforcement Action, don't they have to stop Enforcement Actions if you're paying or if you file for bankruptcy
The IRS does not consider filing the Notice of Tax Lien "Enforcement Action," they're not enforcing anything. Therefore, if it's not enforcement action, the removal of it is nearly impossible.

Is there ANYTHING I can do to release my Tax Lien?
The circumstances are very narrow. The Tax Lien that’s already in existence needs to get released based on agreement to the IRS. A Tax Lien that has been filed is NOT coming off. The only ways to remove it are:

-Pay debt in full
-The Debt Statutes expire

You can discharge a tax lien from property, if you are transferring ownership. You can subordinate a tax lien by having a lender or licensed tax professional place another lien on you that takes priority over your tax debt. Many people look into these services as possible answers, but the laws regarding them are very murky. Consult with a reputable tax debt professional! Find out for sure if these options will improve your situation or make it worse.

Will the IRS remove the Tax Lien if I pay just a little per month?
Not usually. In reality, it's incredibly difficult to remove a Tax Lien. However, f you enter into a Direct Debit Installment Agreement, you can apply to have your tax lien withdrawn, and it may work. Even if your tax lien is not withdrawn, entering into an Installment Agreement can prove credit worthiness. I recommend talking to a licensed tax professional to see if this is a good option for you.
Also, if you have a piece of valuable property, give them the deed and MAYBE the Tax Lien will be removed

"Will the IRS Subordinate my Tax Lien so I can get a home equity loan and pay my debt?"

"Subordination" is the wrong service. Not being able to get a home equity loan because of Tax Lien shows the IRS that you might not have the best credit. Many people that have excellent credit, save for the Tax Lien, can still get the loan. Additionally, if the IRS releases the Tax Lien, they feel you won't have incentive to use the loan to pay them back. In most cases, the IRS won't release the lien so you can get the loan.

Will the IRS remove the Tax Lien if I pay just a little per month?
Not usually. In reality, it's incredibly difficult to remove a Tax Lien. However, f you enter into a Direct Debit Installment Agreement, you can apply to have your tax lien withdrawn, and it may work. Even if your tax lien is not withdrawn, entering into an Installment Agreement can prove credit worthiness. I recommend talking to a licensed tax professional to see if this is a good option for you.

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