Many of the Taxpayer’s coming into our Richardson, TX tax office with IRS Debt have a Notice of Federal Tax Lien (NFTL) or are under threat of an NFTL. As you’ve learned over the past few weeks, the Notice of Federal Tax Lien (NFTL) is a powerful tool of the IRS and having an NFTL filed can wreak havoc over your finances and your life. Today we’ll cover the forms to have an IRS Tax Lien Withdrawn or Released.
Release of an IRS Tax Lien
Generally, the IRS issues a Certificate of Release of Federal Tax Lien no later than 30 days after:
- The taxpayer satisfies the tax liability or the liability becomes legally unenforceable, or
- The IRS accepts a bond guaranteeing payment of the debt.
Once exception is when the 10 year statute of limitations expires on a tax debt. The lien self-releases after 10 years and the IRS does not procedurally send a formal release unless requested by the Taxpayer.
If the Federal Tax Lien has not been released timely, you can request a Certificate of the Federal Tax Lien in writing by mailing to the Advisory Group servicing your area. The address can be found in Pub 4235. The request must include:
- The Date of the Request,
- The name and address of the taxpayer
- One copy of each NFTL requesting to be released
- Why the lien should be released
- A telephone number with the best time to call
Withdraw of an IRS Tax Lien
With a withdrawal, the IRS removes the public notice of the NFTL and demonstrates that the IRS is not competing with other creditors for the property. It is not a statement that the debt is no longer owed. An example of when the IRS withdraws it’s NFTL is when a taxpayer has less than $25,000 and has made three consecutive direct debit payments under an installment agreement that will full pay the debt within 60 months or when the collection statute expires.
A Withdrawal is requested by sending Form 12277 – The Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien – properly.
Discharge of an IRS Tax Lien
A discharge removes the IRS tax lien from specific property. When a lien discharge is granted by the IRS, the property can be sold or refinanced. The NFTL has been lifted only from the specific property identified in the Discharge, the NFTL continues to exist over the other property. The Taxpayer will complete and send IRS Form 14135 – Application for Certificate of Discharge of Property from Federal Tax Lien – to request the discharge.
Do You Need Help?
If you need help with avoiding or removing an NFTL or any other IRS Collection issue, I’d be happy to talk with you. Please give me a call at (972) 821-1991 or email me at bob@jablonskyandassociates.
