In our most recent blog posts, we’ve been discussing the benefits of rush tax relief services when it comes to time-critical IRS actions like the Federal Tax Lien. In our first post in the series, we quote our Federal Tax Lien Service Page to quickly sum up what a Federal Tax Lien is and what it can turn into. For those unfamiliar, or starting the blog series here, a Federal Tax Lien “affects your financial assets, personal property and your real estate. Tax liens can vary based on your individual situation and are the government’s way of protecting their interest in the case that you fail to pay your tax debt in a timely manner. If you do fail to pay the IRS on time, a tax lien will attach to all of your current or future assets until it is addressed. If you do not address the tax debt in a timely manner the lien may turn into a levy where the IRS has the ability to seize said assets.”
We go on to discuss how you would know if you currently have a Federal Tax Lien against you or any of your assets. In our second blog post, How to Avoid a Federal Tax Lien, we discuss how to potentially avoid a Federal Tax Lien by either paying the debt in full or settling through one of the tax resolution options like an Installment Agreement, IRS PPIA, Offer in Compromise or Currently Non-Collectible. For more information about these different tax resolution options, check out our previous blog series: Tax Resolution Options.
After that, in our most recent post, Federal Tax Lien Options, we took you through your options once you have received a Notice of Federal Tax Lien from the IRS. You can pay the debt in full, apply for an Installment Agreement or IRS PPIA, or you can apply for a Federal Tax Lien Discharge or Federal Tax Lien Subordination. In this post and the next, we’ll discuss the Federal Tax Lien Discharge in greater detail and in the following post, Federal Tax Lien Subordination, we’ll go more in-depth about Federal Tax Lien Subordination. Then we’ll wrap it all up with one final post about Federal Tax Lien Withdrawal before we move onto our next Rush Tax Relief Service – the Trust Fund Penalty.
Federal Tax Lien Discharge
According to the IRS’s page, Understanding a Federal Tax Lien, as of Dec. 24, 2020, a Federal Tax Lien Discharge “removes the lien from specific property.” On our Tax Lien Discharge Service Page, we get a little more specific about when and why you would want to apply for a Federal Tax Lien Discharge, saying that you “should apply for a Tax Lien Discharge if you wish to refinance or sell your property after there has been a federal tax lien placed on it. Although it is still possible to sell or refinance the property without a certificate of discharge, the property would remain attached to the IRS tax lien. The new owner would not be subject to paying the tax debt however, the IRS would still be able to place a levy on the property and seize it. Since most potential buyers would not be open to liability, the presence of a lien on the property would likely turn off any buyers from purchasing the property thus, a Tax Lien Discharge comes in handy when it comes to selling or refinance property under a tax lien.”
So if you have a Federal Tax Lien against your home and are looking to sell or refinance in the near future, you may want to seek a Federal Tax Lien Discharge. In our next blog post, Federal Tax Lien Discharge Requirements, we’ll look at what you need to apply for a Federal Tax Lien Discharge and how to go about it.