All IRS Back Tax Help comments are in blue. This review is a further and more in-depth discussion on changes to the IRS tax lien filing policies including what the new dollar thresholds for filing an IRS tax lien, speeding up the time it takes to get a tax lien removed, and getting an IRS tax lien withdrawal once you’re in a direct debit IRS installment agreement.
If you know you need to take action, read my thread about whether or not you should hire someone (You should not automatically) titled “Owe IRS back taxes? When, who, and how do I hire IRS back tax help?” Here’s the link:
As usual, If you like the tone of these posts, contact me for consultation. I can be reached at email@example.com. Before you email me, please click on and read “About irs back tax help”.
Here is the link to irs.gov:
#1. Increase in the IRS tax lien filing threshold
“The Fresh Start changes increase the IRS lien filing threshold from $5,000 to $10,000… The IRS will not retroactively apply the new $10,000 lien filing threshold and automatically withdraw a previously filed lien.” We have seen no change to the IRS’ actual behavior in this regard. We continue to see IRS tax lien filings well below these levels for both overdue 941 payroll tax as well as 1040 income tax. After the date of this announcement, it is enforceable depending on circumstances.
#2. Requesting an IRS tax lien withdrawal after the tax lien has been released
“The IRS may now issue a withdrawal of a filed Notice of Federal Tax Lien after the lien has been released. If you wish to have the Notice of Federal Tax Lien withdrawn, you must request the withdrawal in writing. Please use Form 12277, Application for Withdrawal, (PDF). In item 8, Reason for requesting withdrawal, check box d, the best interest provision.” Please note they say you “must” request the IRS tax lien withdrawal. You cannot trust they will get this done on their own. I have encountered more than one person who was astounded to find out the lien was in place years after they settled their IRS back tax debt. Make sure you keep copies and send the application for tax lien withdrawal certified.
#3. Tax Lien withdrawal after entering into a Direct Debit installment agreement
“If you are a qualifying taxpayer and meet the eligibility requirements, you may have your lien withdrawn after entering into a Direct Debit installment agreement. Your request for lien withdrawal must be in writing. Please use Form 12277, Application for Withdrawal (PDF). In item 8, “Reason for requesting withdrawal,” check box b, the “entered into an installment agreement” provision.” This is the biggest news in our industry in years. The IRS used to never remove a tax lien unless it was their mistake, we proved the lien was poorly perfected, or paid in full. This option is available for individuals that owe 1040 income tax, businesses that owe income tax (not over due 941 payroll tax) , and out of business companies with any type of tax.
In order to qualify you must owe $25,000 or less, have everything paid off in 5 years or less or prior to the statute expiring, all your filings are complete, and you have never defaulted on a direct debit installment agreement previously.
If you’re already in a regular IRS installment agreement, you are allowed to convert to a direct debit installment agreement as long as you meet all of the conditions above. Here’s the IRS phone numbers you’ll need:
|Individuals (Wage & Salary Earners)
As I’ve mentioned in other posts, if you owe $50,000 or more, or the IRS’ actions are not making sense, get some professional help. Contact me and I will give you some guidance or encourage you to hire me depending on what will help you the most.