If you successfully negotiate the withdrawal of the tax lien, by operation of federal law any mention of the lien must be deleted from all three credit reports – Equifax, Experian and Trans Union. The good news is that there is more than one way to eliminate an IRS tax lien, and get the IRS to withdraw the lien, as if it never happened. Here’s a summary of strategies that have proven effective for Faith Firm clients.
The Tax Lien Was Filed In Error. When the IRS agrees to withdraw the lien due to its own error, this should be accomplished with as much fanfare as the lien was filed. The certificate of release should clearly state the lien was filed in error. The lien should be deleted from all three credit reports. You can even provide the IRS with the names and addresses of companies and people you want notified of the screw up. See Code §6326(b).
Enter into an Installment Agreement Where as a Condition the Lien is Withdrawn. You negotiate that the IRS withdraw the tax lien by entering into an installment agreement for you to pay the tax in full.
Offer in Compromise. If you reach an offer in compromise agreement with the IRS, the IRS should be required to withdraw the tax lien upon payment of the offer.
Lien Subordination. The citizen obtains financing of real estate, and the IRS permits the lender to “step over” the lien position in exchange for payment to the government.
Sale of Property. You work a deal to get the IRS to withdraw the tax lien upon sale of the property. Code section 6325(a)(2) authorizes the IRS to release a tax lien within thirty days of being provided with a bond for the tax.
Property Double the Amount of the Tax. Under code section 6325(b)(1) the IRS may discharge or release a portion of the property subject to the lien if the fair market value of the property remaining subject to the lien is at least double the sum of the amount of the unsatisfied liability.
You may gain a better understanding by calling us for a free tax lien analysis or obtaining the Faith Firm free book How to Get Tax Forgiveness.