info@besttaxpro.com
763 477 4205

IRS Tax Liens

  1. Home
  3. Tax Relief Services: Resolve Tax Problems With the IRS and MN DOR
  5. IRS Tax Liens

What is a federal tax lien?

A federal tax lien is the government’s legal claim against your property when a tax debt remains unpaid after the IRS has assessed the tax and demanded payment. It arises by law under IRC section 6321.

Here is the distinction that decides everything else. The lien itself exists whether or not you ever see a document. The Notice of Federal Tax Lien is the public filing that tells lenders and other creditors the government has a claim.

Those are related. They are not the same thing. And what can be done depends on which problem we are actually solving.

What can a federal tax lien affect?

The lien attaches to property you own now and to property you acquire while it remains in effect. The public filing creates practical problems when you are trying to sell real estate, refinance, obtain financing, deal with business assets, or clear title.

What it does not do is take anything. A lien is a claim. A levy is the taking. If money is actually coming out of a bank account or a paycheck, that is a different problem with different deadlines, and we cover it on our levy pages.

Joshua A. Webskowski, EA, USTCP, tax resolution practitioner in Rockford, Minnesota

Four ways to deal with a lien

The right one depends on what you are trying to unblock. Selling a house is a different problem than refinancing one.

Option What it does Authority / where
Release Ends the lien. The IRS releases it within 30 days after the debt is paid, becomes legally unenforceable, or is otherwise satisfied IRC 6325(a)
Discharge Removes the lien from one specific property so it can be sold. The lien stays on everything else IRC 6325(b), Publication 783
Subordination Moves another creditor ahead of the IRS. Does not remove the lien, but can make a refinance possible IRC 6325(d), Publication 784
Withdrawal Removes the public notice. The debt remains, but the filing comes out of the public record Form 12277

Withdrawal has real paths. A notice can be withdrawn when you enter a direct debit installment agreement on a qualifying balance of $25,000 or less that pays in full within 60 months, and in some cases after release with a clean compliance record behind you.

Before I recommend any of these, I want to know three things. What does the IRS account show. What property is involved. And what are you trying to accomplish.

That is an account question, not a form question.

What if you are selling or refinancing property?

This is where liens become a very practical problem.

On a sale, the lien has to be addressed in the title and closing process. Sometimes the tax is paid from the proceeds. When the equity is not there, a discharge application can remove the lien from that property so the sale can close.

Refinancing is a different issue, because the IRS’s position relative to the new lender has to be addressed. That is what subordination is for.

Timing is the hard part. These applications are document-heavy and unforgiving on detail, and closings do not wait. That is why I start with the transaction and the account, not with the form.

What if the tax has already been paid?

The IRS must release a lien within 30 days after the liability is satisfied. If you have paid and the release has not happened, that can be corrected. The first step is confirming what the account actually shows, because sometimes the release is stuck behind a balance you did not know existed.

How I handle a federal tax lien case

A lien case starts with understanding what the lien is preventing you from doing.

  1. Get authorized. We file a power of attorney and speak to the IRS for you, on your behalf, so you do not have to.
  2. Read the account. We pull the IRS records, including the internal transcripts most taxpayers never see, and confirm what is assessed, what is filed, and where the collection statute stands.
  3. Understand the goal. Selling, refinancing, clearing the public record, and resolving the debt are different problems with different applications.
  4. Match the procedure and prepare it properly the first time. Rejected applications cost closing dates.
  5. Address the debt underneath. The lien is the symptom. We put a resolution in place so this does not come back to haunt you.

I have been writing about IRS collection problems for years

Federal tax liens are part of the larger IRS collection process, a subject I have worked with and written about for years.

My first book, IRS Secrets Revealed: How to Survive IRS Audit, Collections & Appeals, grew out of experience I had already built representing taxpayers before the IRS. It covers Collection Due Process, the alternatives to IRS collections, Offers in Compromise, Currently Not Collectible status, and penalty abatement. My later book, How to Get Out of IRS Problems, goes further on liens and levies specifically, as part of a step-by-step look at IRS notices, back-tax options, and resolution.

My work has kept growing since those books were written, including admission to practice before the United States Tax Court as a non-attorney practitioner.

The books do not replace an analysis of your account. They reflect something that matters when you are choosing representation: I have been working with, studying, and writing about these issues for a long time.

Complimentary PDF copies of both books are available through BestTaxPro™.

Get Josh’s free eBooks

Why work with BestTaxPro™?

You work directly with Joshua A. Webskowski, EA, USTCP.

Josh has worked in taxation since 2003, more than 20 years. He is an Enrolled Agent, a Fellow of the National Tax Practice Institute, an author on IRS representation and resolution issues.

He has represented taxpayers in IRS collection matters, lien cases, and Appeals for more than two decades.

When you call, you reach a real tax professional. Not a sales center that hands your file to someone else after you sign.

Frequently asked questions

Dealing with a federal tax lien?

Bring us the Notice of Federal Tax Lien and tell us what it is blocking. We will pull your account and tell you which of the four doors actually opens for you.

Call BestTaxPro™ at 763-477-4205 or schedule a 15-minute consultation online. Based in Minnesota, helping taxpayers nationwide. In-person and online Zoom meetings are available.

Do not enter Social Security numbers, dates of birth, or account numbers in this form. Sensitive documents are shared only after engagement, through our secure client portal.

Schedule a 15-minute consultation

General information only, not tax or legal advice. Individual situations vary.

Menu