Anybody that’s had it happen to them knows that a tax lien is the right to take over possession of something owned if the obligation to pay isn’t satisfied. Basically it’s when the government can claim possession of property as a result of delinquent property taxes or even income taxes.
The lien will remain in effect until all outstanding debt, penalties and interest is paid in full to the IRS. However it’ll actually ruin your credit profile for at least 7 years. The problem that most people face is that they simply tried to ignore the problem and it’s escalated to having a federal lien placed against their property. If they’d simply talked to the government, or utilized debt relief to negotiate the debt, they could’ve avoided this whole mess.
Getting a federal tax lien released can be a real pain, so it’s obviously best to avoid it at all costs. But if you’re already dealing with a tax lien, you’re going to want to get it released once you’ve satisfied the debt.
You’ll need to obtain the exact payoff amount that is owed to the IRS. This amount is a matter of public record so it’s information available to you and the rest of the public. You can get this by contacting the IRS.
Steps to Releasing a Tax Lien
Pay Off the Debt – In order to get a release of federal tax lien you need to pay off the outstanding debt in full. Paying off your federal debt in full is the best option, but it might not be financially plausible. If you need to set up a payment plan, negotiate something that you know you’ll be able to pay off each and every month.
Sell the Property – You can also sell the property that holds a lien in order to pay it off. You need to apply for what is called a Certificate of Discharge which will allow the sale to go through and the money goes to satisfy the outstanding federal debt.
File the Paperwork – Once the debt is paid off and the lien is satisfied you need to file a Request for Release of Federal Tax Lien directly with the IRS. Don’t expect the government to do anything for you once you’ve paid the debt off. If you don’t actively file this paperwork the lien will remain on the government’s books.
Wait for a Reply – Once you satisfy your debt and file the proper paperwork for the Release of Federal Tax Lien, the release notice should take about 30 days to be issued.
Verify Everything – When you get the paperwork back and everything is complete. Make sure that there are no discrepancies in what the IRS sent you. You’ll also want to make sure that the listing on your credit report is 100% accurate. If it’s not, credit repair can make sure that it is.
