Has anyone had any success in having an UNPAID IRS tax lien withdrawn through the new regulations which went into effect as of June 22, 2001? I'm copying and pasting the info below from a posting on Bayhouse last year, but no one ever responded within the thread as to having actually done this. Based on the examples given within the complete text, it seems almost too easy. I just fished this out of the pond of IRS knowledge. Under 26CFR Part 301, RIN 1545-AVOO IRS subject "Withdrawal of Notice of Federal Tax Lien in Certain Circumstances." As of June 22, 2001 there were changes made to the Taxpayer Bill of Rights. Secton 6323 of the Internal Revenue Code of 1986. Written by Kevin B Connelly of the IRS. Specifically secton 501(a) of TBOR2 was amended to allow the commissioner to withdraw notice of federal tax liens for (4) reasons. They are 1. The filing of the notice of tax lien was premature or otherwise not in accordance with administrative procedures of the Secretary 2. The taxpayer has entered into an agreement under section 6159 to satisfy the liability for which the lien was imposed by means of installment payments, unless the agreement by its terms provides that the notice will not be withdrawn, 3. The withdrawal of notice will facilitate collection of the tax liability for which the lien was imposed. 4. The withdrawal of notice is in the best interest of the taxpayer and the United States. There you have the latest. Hope it helps some poor souls out there suffering from the weight of old IRS liens and cannot get a house because of it. The complete text of the regulations is here : http://www.irs.gov/pub/irs-regs/td8951.pdf Any input would be appreciated.
After seeing that little tidbit, I typed up my letter today and it's in the mail. We shall see what happens.
I'm sure this info will help many people. It can be devastating to have a tax lien placed on your property. If you can't pay people can bid on your property for the amount in outstanding taxes and if you son't come up with the money within a certain time they get to keep your property and even if you do come up with the money the money they already bidded on your tax lien/property earns interest sometimes upwareds of 50% from the government. That's why many people invest in tax lien certificates in the states that allow this.
I sent it to the IRS person I've been dealing with locally and asked him to forward it to the appropriate person. I'm sure they have people somewhere who handle this. The posting notes that the IRS Commissioner is empowered to do it but I suspect he's way too busy to be bothered with something this trivial.
I called the IRS and got the address of the IRS Commissioner. Am sending the letter directly to him. I figure he's got someone screening mail and directing it to the proper individuals with responsibility for this particular issue. The address is : Commissioner Charles O. Rossotti Internal Revenue Service 1111 Constitution Avenue Washington, DC 20224 I hope this process proves to be as valuable as it seems like it will. We'll see.
when you say unpaid lien - what do most people have this for? My husband has a lien and never gets his tax return back. Silly question, but is this the same thing? And what is everyone sending out? The one about better for the US and taxpayer? His was for an old student loan. ???
how about if they were unpaid, but then some became paid because of wage garnishment? I am trying to help out a friend in this predicament..
These liens are most often for income tax although an IRS lien can be filed for most any kind of tax one owes the federal government. I would not think that having made partial payments would keep a request for withdrawal from being honored. The key I think is that phrase "in the best interest of the US and the taxpayer." If the IRS is convinced they will get their money faster, that seems to be a compelling reason for approving the withdrawal of the lien since that was the example used in the text of the regulation. Keep in mind it says "the Commissioner may". He isn't required to. Since we have just sent off our request as of a couple of weeks ago, there is nothing I know for sure except that I have a lot more hope about these liens now than I did a month ago DemPooches
Re: IRS...long. nquisitive- I have been dealing with a tax lien for almost 2 years now. I am NOT an atty or a CPA but I have paid for advice from all the professionals and I have studied not only the IRCs (internal revenue codes) but also the relevant info in the IRM (internal revenue manual). Let me try and address the changes you referred to in your initial post: 1. you can get a lien temporarily released IF you can prove there was some procedural error...such as failure to notify, recording the lien in the wrong county, in the wrong name, on a property that was sold and transferred b4 the lien was attached (yes believe it or not b4 the reforms of '98 the irs foreclosed on homes belonging to people who had unwittingly bought them from someone else who owed the irs!) 2. The rest of the amended code has to do with a lien that defeats its very purpose...which is collections. Let me try and explain it with an example: the irs has a lien on your home for 100,000 (this is called an "attached" lien...they can also have an "unattached lien"..I will get to that later.) You only have $50,000 equity in your house. You would be willing to sell your house and pay the irs the $50,000...but because of the lien you can't sell it. In this case it would behoove the irs to release the lien so you COULD sell it and then pay them the money. This would definitely be a "in the best interest" case for the irs and the us govmt. 3. A lien not only attaches to real property...it also attaches to all personal property. That includes everything else you might own. they exempt an amount...this year it is $6,250...that means anything you own over and above that amount theoretically they could levy and seize. 4. An "unattached" lien is simply that...you own no real property or personal property above the $6,250 which basically means the irs can't get anything. Then their reason for keeping it is to be able to get anything you might acquire in the future. Now remember we are talking about liens and not levies...in order to get something from you they must first record a procedurally correct lien then they can issue a levy...with proper notice and procedure...the levy is when they start grabbing stuff...like bank accounts.The irs has super "grabbing" powers..they can even grab disability and social security and 25% of your take home pay..so if they get serious..watch out! Let me add here that the irs is the "super daddy" of collections. It puts creditors and collection agencies to shame. Writing dispute letters to them is an exercise in futility. They work by forms and bureaucacy. If it makes you feel better...write away...but it is going to get you nowhere...and it just might cause more harm than good. Forget threatening them to sue...that would just make them laugh...tax court is not like regular court. In tax court the taxpayer is guilty until proven innocent...meaning the burden of proof falls on the taxpayeys side. There are only three ways to deal with taxes owed, liens and levies and here they are in no particular order: 1. Pay them 100%...in one big payment or in an installment agreement. 2. File an Offer in Compromise...which is a way to negotiate a reduced amount (beware of all the "scam" artists on the web that say they can do this for pennies on the dollar...this is just not so...it is a long and arduous process which could take 18 months and result in a rejection). 3. File for bankruptcy...Chapter 7 if the taxes have been timely filed and the taxes are due for returns older than 3 years and 240 days past assessment. Chapter 13 for taxes due on unfiled returns and the taxes due are beyond the 3 years and 240 days past assessment. Chapter 13 is called the "super discharge" because it is the only way to get rid of taxes owed on unfiled or fraudelent returns. So as you can see bankruptcy can only be effectively used for "older" taxes due. The OIC can be used for the more recent taxes due. But remember in your considerations that bankruptcy reform..which has been put on the back burner for now...will eliminate some of these benefits...so keep that in mind. In closing...irs liens never go away...if the returns were timely filed the lien expires after 10 years...but the irs can renew the lien if they do it b4 the 10 years have expired. My advice to anyone is to do what I did...do your homework and then consult with competent attys or CPAs. Hope this helps. clc
Re: IRS...long. clc, Thanks for all the great information. I have read through your post a couple of times and I may be incorrect in this, because you obviously have far greater expertise in this area than I do, but I think I may have been able to present a case for a lien which is, in fact self-defeating. Certainly you are correct about the long arm of the IRS. They are the most intimidating entity I can imagine. What will hopefully prove to be a positive in my situation is that the liens are relatively small, I am prepared to pay them (with the financing I'll be able to get once the liens are withdrawn), and I am asset-free and income-free. This is my position in filing the request for withdrawal. (The financing point was merely a reason to put into the withdrawal request, in reality, it is not needed to pay the liens.) If it turns out that the request needed to be on a form, then I can file the request again on the proper form. These liens have been there for 8 and 10 years. There's no huge rush on my part to get rid of them, but once they're paid I have nothing to offer in "bargaining" at all. That's why I was so encouraged when I read about requesting withdrawal referenced in my post above. Maybe I have a case that will work. Maybe not. But at least it's worth a shot before I just pay them and resign myself to take the hit on the credit report for another 7 years. It just doesn't seem that I have anything to lose at this point. Thanks again for your kind and thoughtful post. I do appreciate you taking the time to provide such a wealth of information. nquisitive
Re: IRS...long. CLC posted some very good information Here is another piece of information regarding the IRS: The IRS has 10 years from the date the tax is assessed to collect it. If they do not collect it by that time, the debt evaporates. I know this because a friend of mine is dealing with this. They had a huge tax bill and received the notice of lien in the mail. The notice itself indicates that the Notice of Lien shall serve as a Release of Lien on the indicated date. The indicated date is 10 years from the assessment date. They are in their 8th year right now and live pretty much from check to check and don't own anything. They send a small amount to the IRS every month but the IRS has deemed the debt uncollectible since they have no money to pay it. According to Experian, they keep unpaid tax lien information on your report for 15 years. I think it's 15 years AFTER the lien has been released which IMO is bullsh-t. They should at least indicate on the credit report that the lien is released. Then prospective creditors will at least know that the lien is dead and not enforcable. Just leaving it on the report as IRS Lien without clarification can shut you out of every credit you apply for.
Re: IRS...long. The IRS is a bitch, you need an attorney, you can have them not put a lien on your credit if you negotiate that as part of the deal. By the way, BK and Setting up a payment plan can indefinitely displace the SOL on the TAX debt..
Re: IRS...long. shirley, The irs can extend a lien...they have to do it b4 it self-releases. Plus your taxes have to be filed...there is NO statute of limitations on taxes due on unfiled feturns. It is really a vicious cycle...many people who owe taxes on unfiled returns continue to not file as they are afraid of what the irs can do to them so they become serial non-filers. So if your friends did not file they need to look at other solutions for their irs probs. clc
Re: IRS...long. I posted this on another thread...a lien can only be released not withdrawn. If you have paid the underlying taxes then read irs pubication 1450...if not then read my earlier post on this thread as it is pretty well explanatory on the ways to deal with a irs tax lien that is unpaid. here is the site for pub. 1450...you must have Adobe installed: www.irs.gov/pub/irs-pdf/p1450.pdf hope this helps. clc
Re: IRS...long. clc, The regulations referring to "withdrawal" of the notice of the liens are here: http://www.irs.gov/pub/irs-regs/td8951.pdf I guess technically the lien itself isn't withdrawn, but if this removes the notice from the CRAs so the liens can be paid, it's the outcome I'm looking for. We'll see what happens. nquisitive
Re: IRS...long. nquisitive- if I understand your posts what you are trying to do is to get the irs to release/withdraw the lien in order for you to pay by financing using the property that the lien is attached to...this is effective if the equity in the property is 2x the amount of the lien. I wish you luck...the irs is tough,tough,tough...after the '98 reforms they were supposed to be the "friendlier" irs...but that is relative to what they were b4 '98...which was they were monsters...now they are mini-monsters! IMO the best thing to do is spend a couple of hundred dollars for the advice of an expert...either a tax CPA or a tax atty. Don't wait forever for the irs to respond as the meter is ticking while you wait in penalties and interest. clc
