The Internal Revenue Service (IRS) processes up to 155 million taxpayer returns each year. If an individual doesn’t pay their tax bill, the IRS may file a Notice of Federal Tax Lien that notifies potential creditors. This lien can lay claim to all your current and future assets. What can you do to get a tax lien released? Here are four ways on how to get a tax lien released.
Pay The Full Debt
If you pay off your debt completely along with any penalties or interest, your tax lien will be released. However, it can still show up on your credit report. In order to have it completely removed from the public record, you will have to have the IRS withdraw it.
Offer In Compromise
An Offer in Compromise (OIC) is where you can settle your debt for a lesser amount as a way in how to get a tax lien released. You’re given up to two years to pay off the settlement amount after it’s accepted. With an OIC, you can make monthly payments. In order to qualify, you’ll need to disclose a substantial amount of financial information and meet specific requirements.
Wait Out The Statute of Limitations
Once the statute of limitations on collection of a debt expires, the IRS is no longer able to enforce the bank levy. The date for expiration is typically ten years after you’ve filed a tax return or the IRS has assessed it. The statute of limitations can be extended by the IRS if you’ve filed bankruptcy, an OIC, or have signed a tax collection waiver.
Bond Guaranteeing Payment
Another way in how to get a tax lien released is to post a bond guaranteeing the payment of your tax debt. The result of doing this is similar to paying your debt in full. It can be challenging to qualify for a bond because it can have an adverse effect on your credit score.
Getting a tax lien released can be challenging. If you’re struggling, you may want to consider reaching out to a professional tax lien attorney to help you navigate the IRS collection process. A tax lien lawyer can help you figure out which solution is best for your unique situation in order to achieve the most beneficial result.