Tax Liens

How to Negotiate with the IRS to Release a Tax Lien

If you owe back taxes to the IRS, it may have placed a lien on your assets to recover the money you owe. Receiving notice of a tax lien can be stressful, but you do have a few options to release the lien and negotiate a payment plan instead. 

Learn how to negotiate a tax lien with the IRS, then contact a tax consultant for personalized tax resolution and defense services. 

What Is a Tax Lien? 

The IRS has more power to recover debts than a typical lending service. If you fail to make the tax payments you owe, the IRS can place a tax lien on your assets, which means it has a legal claim to those assets to pay your back taxes and any other tax debt you owe. These assets may include your house, car, business, or bank accounts. 

A tax lien gives the IRS precedence over any other creditors’ claims to your assets. This legal claim will show up on your credit report and affect your ability to sell the assets the IRS has claimed. 

If you ignore a tax lien, the IRS could seize your assets to pay your tax debt. Ignoring a tax lien will only lead to worse consequences; instead, work with a tax professional to explore your options and settle your debt.

Options for Removing a Tax Lien

The IRS offers a few tax resolution methods to remove a tax lien: 

Pay Your Tax Bill Outright

The most straightforward method for a tax lien release is simply paying your tax bill. If you have the money to pay your bill in full, visit the IRS website or mail a check to the address on your lien notice. 

Of course, many people facing a tax lien don’t have the funds to pay their tax bill. But if this is a viable option, it’ll leave you with the fewest penalties. 

File an Appeal With the IRS

If you think the IRS filed your tax lien in error, you can submit an appeal through the Collection Appeals Program. You’ll want a qualified CPA or tax attorney to defend you throughout the process. 

But if you know you owe back taxes, filing an appeal will probably be a waste of time. Instead, explore one of the options below. 

Negotiate a Payment Plan 

The IRS has become more lenient with payment plans since the COVID-19 pandemic. If you can’t pay your tax bill outright but think you can pay it in installments over time, the IRS may agree to a payment plan and release your tax lien. 

You can negotiate either a short-term payment plan lasting fewer than 180 days or a long-term plan that requires monthly installments.

File an Offer in Compromise

An Offer in Compromise is a way to negotiate your debt for less than what you owe. This tax resolution method is available to people who are going through financial hardship and don’t have the funds to pay their tax debt in full. 

Through this IRS negotiation, you could choose to pay your settled amount in a lump sum or through monthly installments. 

File for Bankruptcy

If you’re overwhelmed with debt, filing for bankruptcy is a last resort to consider. Bankruptcy could remove your tax liens and other debts, but it will severely impact your credit score for years. 

Before you decide on a tax lien withdrawal solution, speak with a professional tax advisor who can recommend the right path. Call Levy & Associates Tax Consultants today at 800-TAX-LEVY for a free consultation

Contact Levy & Associates for Dependable Tax Audit Services

Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.

There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.