Is getting a tax lien withdrawal easy?

Forms can get a bit complicated and they require clear and detailed communication of the reasons why you think the IRS should withdraw your lien. Multiple errors can be made on the forms, such as missing information or a missing signature. Also in choosing the reasons, you have to pick the right reason and attach the appropriate back up to support your reasoning. We strongly recommend you be very careful completing these forms, or get the help of a licensed professional, in order to maximize your chances of getting your withdrawal request approved.

What if my request is not approved?

Because in many cases, having your tax lien can impact your financial situation, affiliations, home ownership, job placement and more, there are several ways you can go about when your withdrawal request is denied, including, according to the IRS, contacting the manager overlooking your request, and filing an appeal. To avoid having to deal with denial, make sure you familiarize yourself with the forms and instructions of lien withdraws, and you have carefully completed all the sections of the forms, attached the appropriate supporting documentations, and signed the form. Doing so will increase your chances of having your withdrawal approved. You can always hire a third party licensed professional, such as our company to ensure the completeness and accuracy of the process.

What is Trust Fund Penalty?

A Trust Fund in terms of employment tax should not be mistaken with a trust fund in terms of wealth management. This is the payroll tax amount assessed to the officers of the business. Tax resolution can help reduce and or arrange the payment of these taxes.

What is a Trust Fund Recovery Penalty (TRFP)?

A Trust Fund Recovery Penalty can be assessed if the unpaid trust fund taxes cannot be immediately collected from the business. This often happens if the business falls on hard times and taps into that fund for any reason. According International Revenue Code 6672(a) an individual can be held liable for penalty for willful failure to collect, account for, or pay to the IRS the taxes for the business.

Who is Held Responsible for the TRFP?

According to the IRS, the TRFP can be assessed against any person who is: responsible for collecting or paying withheld employment taxes, willfully fails to collect or pay the taxes.

Tax Lien Withdrawal

What is Tax Lien Withdrawal?

You may be eligible for a Tax Lien Withdrawal if you have entered into a direct debit installment agreement or have come to some sort of an agreement regarding your tax debt with the IRS. The IRS places a tax lien on property or assets when you fail to pay a tax debt. A tax lien withdrawal makes it easier to sell your property or assets if you have a federal tax lien placed on them as it removes the Public Notice of Federal Tax Lien from the asset in question. This means that the IRS is no longer in competition with other creditors.

How Can I Become Eligible for Tax Lien Withdrawal?

According to the IRS, there are two options:

OPTION 1: Lien has been paid off and released. According to the IRS, the criteria for this option is as follows:

OPTION 2: Direct debit installment agreement allows for the filing of a tax lien withdrawal.

This option allows you to file for a withdrawal if you have entered into a direct debit installment agreement or have converted your regular installment agreement into a direct debit installment agreement. According to the IRS, the criteria for this option is as follows:

You are a qualifying taxpayer (i.e. individuals, businesses with income tax liability only, and out of business entities with any type of tax debt)
You owe $25,000 or less (If you owe more than $25,000, you may pay down the balance to $25,000 prior to requesting withdrawal of the Notice of Federal Tax Lien)
Your Direct Debit Installment Agreement must pay the full amount you owe within 60 months or before the Collection Statute expires, whichever is earlier
You are in full compliance with other filing and payment requirements
You have made three consecutive direct debit payments
You have not defaulted on your current, or any previous, Direct Debit Installment agreement

The IRS provides other eligibility criteria to help you decide whether a tax lien withdrawal is the best option for you. Eligibility for this option begins with an application requesting a tax lien withdrawal from the IRS. According to the IRS, the following is a list of other criteria for eligibility:

You can provide evidence that the tax lien was not in accordance with IRS procedures or it was filed prematurely.
You entered into an installment agreement to pay off the past due tax lien.
Your tax debt is under $25,000.
You have entered into a direct deposit installment agreement.
You believe that the withdrawal of the tax debt is in the best interest of the government and yourself.
Withdrawal of the tax lien would allow easier repayment of the tax debt.

In addition to meeting the above criteria, you must provide documentation to support the claim as well as a list of financial institutions that you would like to have notified of the withdrawal of the tax lien. Visit our page explaining our tax problem resolution services for more information.

What Is A Direct Debit Installment Agreement?

The key to most eligibility requirements is the entering into a direct debit installment agreement, even if you still have a tax debt. A direct debit installment agreement is simple: installment payments are paid directly from your bank. You can simply set this up online through the IRS website.

Next Steps:

Applying for a tax lien withdrawal may be the best option for you if are wanting to sell your property and there is a public notice of federal tax lien on your assets, which renders them undesirable to buyers or creditors.

It is best to consult a tax professional to determine if this is the best option for your situation. A tax professional can assist you with the filing of the withdrawal of tax lien. Give us a call today to consult with a tax professional about your situation as to whether a Tax Lien Withdrawal is advantageous for you.