What is a lien?
When the IRS perceives you owe them money, they will file a lien with the County Clerk of Court in your county of residence and any counties where you own property. This prohibits you from selling any real property you own like a house or piece of vacant land. It is used as security for the tax debt. It also hits your credit report and causes the score to plummet. Once a lien is issued, a levy might not be far behind. Not a great place to be! However, there is help available.
Release of lien
Several potential ways to get a lien released include:
- Filing any delinquent tax returns. When you don’t file a return and the IRS files one for you (a substitute for return), giving you no benefit for any deductions or exemptions. Many times just filing the original return wipes out the balances due.
- Get into a direct debit installment agreement where your balance owed is less than $25,000. You must make 3 payments under the agreement before you request lien release.
- Pay the balance in full. If you do this, first make sure that you actually owe the money. We see many instances when taxpayers have paid balances that they didn’t owe because they were so intimidated. When you have funds for the final payment, go to your local IRS office and make the payment there with a certified check. Ask for the lien release right then. If you don’t, it could take months for it to be processed. Do make sure it gets filed with any counties the original lien was filed in.
- If there is a lien on a house you own, your mortgage is greater than the value of the house and you want to do a short sale on the home, we can petition the IRS to release the lien. This requires a large amount of documentation and about 30 days.
- Offer in Compromise