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IRS Tax Liens FAQs Form-668-Y(c)

What do you want to know about Tax Liens

IRS Tax Liens Form-668-Y(c)

How Do I Remove IRS Liens on Property?

Generally, the only way to remove tax lien upon the following events;

  • Pay the tax in full,
  • Submit, get acceptance and full pay the settled debt of an Offer in Compromise,
  • Post a surety bond, or
  • Establish a direct debit installment agreement and upon specific circumstances petition for a release
  • Exceed statute of limitations and petition a release.

How badly does a Tax Lien affect my credit?

We have been told by credit repair agents/counselors that it is as devastating as filing a bankruptcy, on your credit.   We have been told that taxpayers can expect a 100-200 point drop based upon other circumstances.

Does the lien affect just my home?

The general tax lien is provided for by IRC § 6321 and is a very broad lien; it generally encompasses all of the taxpayer’s property or rights to property as security for a tax liability. The courts have interpreted this very broad language to include property of greatly varying natures, as well as future interests, contingent interests, and executory contracts.   The IRS tax lien is considered a "general" tax lien, sometimes referred to as the assessment or "SECRET" lien. The federal tax lien arises when the Service meets the requirements of IRC § 6321, i.e., an assessment and a notice and demand for payment. However, the law provides that in order for the federal tax lien to have priority against certain competing lien interests, the Service must file a Notice of Federal Tax Lien pursuant to IRC § 6323.  The lien is effective from the date the Government assesses the tax, that is why it is known as a SECRET lien.   The Service is not required to file a Form-668-Y(c)  in order for the tax lien to attach.   The Service may file a Form-668-Y(c)  in order to have priority over the taxpayer’s other creditors.  The IRS will typically file with the Country Recorder’s Office, typically in your state of residence.

What if there is an IRS Tax Lien on my home?

If there is an IRS tax lien on your residence you cannot refinance, short sale, sell or transfer the property in any way until you have satisfied the tax lien or receive a subordination of the debt.   In special circumstances (IRS gets) paid the IRS will subordinate that debt to allow the sale.  The debt typically must be paid at closing.

What happens if the statute of limitations has expired and the Tax Lien has not been released?

All Federal Tax Liens must be refiled within the required refiling period to retain priority as of the initial filing date. If this is not done, most NFTLs filed after December 1982 will self release thirty days after the date ten years after the assessment, regardless of any extension or suspension of the collection statute of limitations.  This does mean that the IRS will issue a lien release without taking them to task.  We would be happy to get your lien removed.  Once released, we will provide each credit bureau a copy of the lien release.

 

Let the experts at Legacy Tax & Resolution Services represent you.  Work with our team of Certified Tax Resolution Specialists to resolve your issue(s) quickly.  Best of all, you don’t have to talk to the IRS or State; we can speak on your behalf.

 

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