First, did you receive IRS Form 668, which is the Notice of Federal Tax Lien? The IRS must notify you within 5 business days after it files the lien by providing you with that notice. The notice may be mailed, given to you, or left at your home or office. You have 30 days, after that 5-day period, to request a Collection Due Process Appeal. If you recently received notice, and 30 days has not expired, you should immediately appeal.
Second, if you blew the time to appeal, you still have tax lien options. And there are two basic ways to resolve a tax lien:
- Lien Release. When a lien is released, it no longer encumbers title to the property. Federal tax liens are released when the tax liability is paid or the time limit to collect the tax expires. The expiration date is found on the face of the lien. Yet when the IRS releases a tax lien, the citizen’s credit report still shows a tax lien with a “-0-” balance. That’s a negative narrative that remains on credit reports for 7 years from the release date, and it will lower the taxpayer’s credit score as long as it’s reported.
- Lien Withdrawal. When a lien is withdrawn by the IRS, it’s as if the lien never happened. The lien no longer affects title to property and by operation of federal law the lien is deleted from all three credit reports – Experian, Trans Union, and Equifax. The IRS will withdraw the lien for one of four reasons. A clever, experienced tax lawyer can argue that one or more of these reasons apply.
For more information on how to resolve an IRS tax lien, get the free book, How to Get Tax Forgiveness.