Hi Folks, Newbie and happy to be here...I have a few messy items on my CR's that should be easy to get help for in the proper areas of the forum, but my first issue is my biggest. I will try to be brief, but I want to ask for any assistance/info I can get with possibly removing an old tax lein from my CRs and do not want to leave out any details: -1987 - Meet a nice young lady who is divorcing her hubby. -1988 - Divorce is finalized and we marry -1988 - Unknown to me, their divorce settlement includes the sale of their mutual home and a split of the equity - She recieved around $50k -1988 to 1992 - I blindly allow her to control our finances and pay the bills -1992 - I discover her lies, deciet and excessive spending habits have killed us and we seperate -1993 - (May) IRS informs us WE owe $12.5 for cap gains on the sale of the home. I make an appointment with a local IRS Agent and take the wife with me and I am told that since we filed jointly when the tax came due, I am liable as well. I plead no knowledge to the money, etc...and the agent said to go away until they looked into it further. -1993 (June) We jointly file bankruptcy but were told we could not include the owed taxes in the discharge of debts, so we do not. -1993 - (August) Our divorse is finalized - she dissappears (honestly - I have not seen her since) -1993 (Sept) I receive a notice of Federal Tax Lein and Wage Garnishment from the IRS - I am young and scared and do not want my employer to get a wage garnishment on me, so I call the IRS immediatly. I explain my meeting with the agent and that I am awaiting further direction, but am told the only way at that time to stop the garnishment was to make payment agreements, so I did! I arranged to have a tiny amount pulled from my pay bi-monthly and wired directly tyo the IRS. I was also informed that any money owed to me by the IRS for yearly tax returns would be held until the debt was paid off. I agree, happy at this point my employer was not going to see a wage garnishment and life goes on for a while... -1996 (Feb) Leave that job for another - completely forgot about the payroll deductions to IRS - they stop. -1996 (April) Re-marry to a wonderful woman -1997 (Jan) Our only child, a wonderful son who is now a relatively happy and healthy 10 year is born with major heart problems not diagnosed during pregnancy - his entire left heart is atrophied and for the first 4 years of his life undergoes numerous procedures, including four open heart surgeries -1997 The IRS has realized they are no longer getting my deductions and send me a letter indicating I am still liable for the tax debt. No excuse, but I am a little pre-occupied and ignore the letters - At that point, we are all basically living in the hospital for months at a time. -1997 to Now Continued to receive letters occassionally from the IRS indicating debt, but I made no attempt at any contact with them. They have continued to hold my returns (Although I have not filed this year as of yet - no real motivation to do so before 4/15). So there are the details...I realize that I assume responsibility for the debt when I made payment arrangments, and there was no such thing as innocent spouse back then, or any idea if this would have even fallen under that. We did keep seperate bank accounts when we were married but I cannot prove that some of that money was not spent on mutual items for the two of us...I just have no idea - she went through money like a sled through snow. As far as the 10 year SOL on fed taxes owed, I am wondering if it was extended to 2006 because I continued to make payments via payroll deductions until that time...or if by continuing to withhold my yearly refunds asd late as last year has done the same. Again, after the payroll deductions stopped in 1996 I had absolutely no contact with the IRS over this matter, other than the once or twice yearly 1st class letters infoming me of the debt. The leters actually stopped last year. As for the bankruptcy back in the early 90s, again, we did not attempt, nor could we, to include the tax liability in that. I am not really looking to wake the sleeping giant on this and try to go through the IRS to remove the 1993 Federal Tax Lein from my CRs, but wondering if there is anything outside of that, such as a dispute letter to the CRAs to possibly have them removed. If so, can anyone suggest the proper format? Could an attempt to dispoute this through the CRAs result in contact with the IRS and a re-opening of the issue between the IRS and me? That's all for now...thank you for reading this and if you have any kind advise, it would be deeply appreciated. Again, I am a newbie and glad I found this site - seems my journey to resolve som CRA issues just got a "Big" boost. I have to run off to work now, so if anyone responds I may not get back to you until this evening! Best to you all, Opus (Ron)
First, my suggestion is to speak with a tax attorney, if you can afford it. Your situation is sticky, because you entered into a payment arrangment. Per the IRS regulations, it would seem that you may have run out the 10 year clock on collecting this money, but again you need a true tax attorney to review the law and the situation. As for your credit reports, I would dispute as past SOL. I do not think you have anything to lose by entering a dispute. Per your belief, you should be past SOL, and therefore are submitting a valid dispute. Federal tax liens are perhaps the hardest items to remove from a credit report. But, I would say you need to address the tax liability first. They are easy to verify via the internet, and other services. You will not be able to secure a mortgage without clearing this up, and perhaps other types of credit could be denied. So, at this point, I would speak to a tax attorney. First to find out if you are legally obligated to pay the owed tax now, and two, to attempt a settlement of the owed tax. Theoretically, you are only liable for half the tax due, your ex-wife is liable for the other half. An attorney may be able to help with the Fed Tax Lien reporting on your credit reports also. There is a form for "Requestfor Withdrawal of Federal Tax Lien" on the IRS website, but the conditins are difficult. You may have a chance since one of the conditions is a "mistake" made by the IRS. Telling you to wait when you first went to the IRS may qualify. Also, if it comes down to you owing the money, make sure you negotiate withdrawal of the tax lien when you make a payment arrangement, (this is also one of the conditions for the Request for Withdrawal), BUT you must stipulate this when you enter into the agreement. Any other questions, or details you have for the situation, please let us know, we will try to help.
I have some good news and some not-so good news. First, let me state that I am an Enrolled Agent licensed by the IRS to represent taxpayers and I specialize in the type of issue you present. First, the very good news: The tax debt is probably legally uncollectable by the IRS now. The tax debt was assessed 9according to your time line) in 1993. The SOL for collections is 10 years, but there are some extenders - the BK is one of them, even though you didn't include the IRS inm the BK, you were still protected by the Automatic Stay. This extends the SOL for the legnth of time you were in the BK plus 6 months. 1993 plus 10 years plus 1 year for the BK and the 6 month extension does not reach ino 2007. Now, the not-so-good news: The Tax Lien can survive the expiration of the SOL. The Lien 9after the expiration of the SOL) is an attachment against your assets owned during the pendency of the SOL. It is forcing your property to pay, not you (figure out the lawyer's logic there). The Tax lien can stay on your credit report for as long as the lien is outstanding, plus 7 years according to FCRA. With the above in mind, if you want the lien released, you will have to do an Offer in Compromise with the IRS, which will legally pay the taxes owed and at that point the IRS will release the lien. The requirements for an OIC are very complicated and I suggest you speak with an EA or a CPA or an Attorney who specializes in that kind of tax practice.
Regarding the release, won't the "Released Lien" also stay on the credit report for seven years from date fully paid? Payment does not mean that the credit report listing will be removed completely, only changed to "Released Federal Tax Lien".
You guys are wonderful - not what I wanted to hear, but the truth is sometimes tough...I think I will look at an attorney. Question, if I dispute this with the CRSa on the basis of statute of limitations, what is the worst that could happen? Ron
If you dispute the liens based upon past SOL, the worst that can happen is that they remain (as they are today on your credit reports). IF...you pay off the lien somehow, it could be "updated" to a released lien.
The "Released Lien" listing will look better for credit granting approval purposes, but it will still have a negative impact on the FICO score. Do you think this person has a chance of "withdrawal" with the OIC?
Withdrawel being have the IRS remove the entry as part of the OIC? By the way, I do not want to be a scofflaw, but the angel on my left shoulder says make arrangements to pay off the debt, regardless of the SOL and the little devil on the right shoulder screams "It was never your debt in the first place". Besides, with penalties and interest, I could only imagine that an OIC would be way above my current abilities!!! VR Ron
Yes,withdrawal meaning remove the lien "as if it never happened". I believe that is the language in the regulations and form. As for the "duel on your shoulders", it comes down to some very basic credit needs. If you plan to take out a mortgage, then you must take care of this, as no mortgage holder will grant one without the lien released. On the other hand if you can wait out all the years required for it to fall off your credit report, then do not pay. But, if you wait it out and it falls off, say you do apply for a mortgage, it may come up during a title search, as the lien itself can stay indefinitely as a public record. Again, you should only be liabel for half the back taxes owed (in my opinion), and it is probably best to get this behind you. See what kind of a deal you can make, and have done with it.
FlyingIFR - forgive me...just re-reading posts...So just to understand, they cannot come after the debt right now, but if I were to obtain property, i.e. a home, they could seize it regardless of the 10 year statute of limitations???
I also found this on an IRS info web-site...states the lein releases automatically if not renewed by the IRS...any thoughts? Releasing a Lien We will issue a Release of the Notice of Federal Tax Lien: Within 30 days after you satisfy the tax due (including interest and other additions) by paying the debt or by having it adjusted, or Within 30 days after we accept a bond that you submit, guaranteeing payment of the debt. In addition, you must pay all fees that a state or other jurisdiction charges to file and release the lien. These fees will be added to the amount you owe. Refer to Publication 1450, Request for Release of Federal Tax Lien. Usually 10 years after a tax is assessed, a lien releases automatically if we have not filed it again. If we knowingly or negligently do not release a Notice of Federal Tax Lien when it should be released, you may sue the federal government, but not IRS employees, for damages.
The 10 year SOL mon cleections is binding on the IRS. Once Statute has expired they cannot come after you for the debt. Any property that the lien attached to can theoretically be attached. That is not the case, nor is it the case that IRS automatically releases the lien after the SOL has expired - you have to get them to do it, and the Lien release section of IRS (located in Cincinatti) does not give out its phone number and takes its sweet time responding to letters.
What can I take from this quote, pulled from the IRS site on Leins. "Usually 10 years after a tax is assessed, a lien releases automatically if we have not filed it again. If we knowingly or negligently do not release a Notice of Federal Tax Lien when it should be released, you may sue the federal government, but not IRS employees, for damages."
I was pretty concerned about going on to the IRS website to look at codes, as sometime I feel you could take my FICA score, divide that by 10 and come up with my IQ as well, but I went anyway. I actually founds a couple of issues 1, By entering into a payment agreement in 1993, the lien should have been removed at that time. 2, I would have had to sign an extension to the SOL for both the collection of assessed taxes and the Lien to keep it into effect for longer than 10 years, which I did not, and 3, the Lien expires on the date provided on the NOTICE OF FEDERAL TAX LIEN. So I went to my files and sure enough, I have the lien, form 668 filed by the IRS with the Clerk of the Circuit Court in my county on August 10, 1993. In letters larger than life in the middle of the form: IMPORTANT RELEASE INFORMATION: With respect to each assessment listed below (I have only the one assessment listed) unless the lien is refiled by THE DATE GIVEN IN COLUNE (e), this notice SHALL, on the day following such date, OPERATE AS A CERTIFICATE OF RELEASE as defined in IRC 6325(a). Colume E 07/14/03 I have not been served with a refiled lien through certified mail, as required, and no other lien appears on the CRAs, but since liens must be filed in the jursdiction where the person resides I can go down to the circuit court and pull records to see if there is an updated lien. I imagine that with the information above stating my form 668 operates as a Certificate of Release and the county has nothing else on file, I can use that as the release and dispute with the CRAs and let it come back as unverified?????? Thoughts?
Just to cover yourself, check the records filings at the address where you are now, and for the address at the time of filing the lien. It is very likely that you can do this via the internet, as most counties have websites that display these records. Just verify that nothing new has been filed. If not, then per the date on your lien, it should turn into a "released lien". Per flyingfirs post, you may have to be persistent in your letter writing to get this accomplished. Next, you could dispute with the CRAs on the basis of status for now "Released". However, it is possible that the "Released Lien" can stay indefinitely on your credit report, as the law only details removal for seven years after tax paid. It's a judgement call at this point, which is more improtant to you? Not paying the tax arrears, or the reporting on your credit reports?
If the tax debt were still within SOL I would have suggested that, but the SOL makes that argument moot.
I honestly believe with the age of this lien and nothing else on my CR, a mortagage at an accceptable rate would be obtainable. After all, a lender would have no concerns that any propoerty would be siezed. Agreed?
