Arizona

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By Michael S. Anderson of Anderson Tax Law logo for Arizona tax attorney Michael S. Anderson P.C.
  • IRS Tax Lien? – Short answers to the most common questions

    elephant leaning on mom-thumb-375x282-55228When you settle a tax debt, pay it off or discharge it in Bankruptcy, when does the IRS Release the underlying tax lien?

    If the debt has been settled, paid, or discharged, Internal Revenue Code 6325 tells the IRS to release the lien within 30 days. If it doesn’t you can contact the IRS Lien Desk at (800) 913-6050.  If the Statute of Limitations on collection of the debt has run out, the lien runs out with it.  The Form 668(Y)(c) or Notice of Federal Tax Lien will state the date that the lien expires if it isn’t re-filed.  On that date, the lien becomes un-enforceable.  The IRS Lien Department is sometimes reluctant to issue a separate release when the lien has expired.

    Who tells credit-reporting agencies that an IRS lien was released?

    The Credit-Reporting agencies scour county recording documents and in theory will see the recorded Certificate of Release.   Two problems pop up in this regard…first, you may need to record the Certificate yourself and second…the Credit-Reporting Agency may not see it.

    It will be best for you to order copies from the IRS of the release and to send them to the Credit Agencies yourself and than to check and re-check your credit reports to ensure the release shows up.

    What if the IRS lien on the credit report isn’t yours? 

    You could check the County Recorder/Court Filing records of every County you have lived in since the Lien appears to have been issued or you could work backwards and ask the IRS to send you information about where the lien was recorded and what debt is was based on and when it was recorded.

    You may need to hire an attorney or at least get the Taxpayer advocate involved to sort it out.

    What if you find an old tax lien on your credit report that you paid off? 

    Talk to an experienced tax resolution lawyer who can research the history of the account to determine the facts.  You don’t want to necessarily jump in and contact the IRS as you may wake the giant prematurely if you do in fact owe and the Statute of Limitations on collection is chipping the debt away.

    What if you need to get the lien release pronto because you are trying to close on a home loan?

    Contact the IRS Lien department mentioned above and if that doesn’t work contact the IRS taxpayer advocate.  If you go to the IRS website at www.irs.gov you can find the Advocate in Arizona.

    Is there a way to get the lien removed from my credit report permanently?

    Three ways:  First, if the lien was released, the information about the lien will or should disappear from your report in about 7 years.  Second, if the lien was released, you can ask the IRS to “withdraw” the lien.  If it agrees, the withdrawal document will tell the Agency to remove any record that it existed.  Third:  If your situation allows and you still have tax debt, the IRS may agree to withdraw the lien.  Talk to an Attorney about this.