Tax Lien Questions

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Hit with a tax lien recently? If so, you owe it to yourself and your family to learn what your rights are and what your next steps should be in dealing with it. Getting the answers to your Tax Lien Questions at this stage of your problem is crucial.

Hi, I’m Darrin T. Mish, the IRS Solution Attorney. If you have a tax lien on your credit report I urge to continue reading what I have to share with you on this page. It’s also important that you learn the difference between a tax lien and a levy if you don’t know it already.

Gavel laying on top of dollar bills with text that reads "Tax Lien Questions" underneath it.
Eight Tax Lien Questions & Answers

When you pay or settle a tax debt, how long does it take the IRS to release the lien? What is the procedure for doing so?

Answer: The statute says that they have 30 days to release the tax lien. See Internal Revenue Code 6325. That’s how it’s supposed to work, but in reality, they often overlook it and it, doesn’t get done. If this happens a taxpayer can contact the Tax Lien Questions Desk by phone ( 800) 913-6050 fax (859) 669-3805.

If you look at a copy of an actual Form 668(Y)(c) Notice of Federal Tax Lien, you will see a bold black box about half down the page on the left-hand side. It says that if the lien is not refiled by the refiling date in column (e), then the lien is releasable on its face.

That sounds complicated but what it means is that if another lien wasn’t filed before the dates in column (e), then the claim is no longer enforceable. This sometimes complicates matters because the IRS is often reluctant to issue a release for an expired lien.

Note: I cover more on this topic on this episode of my Radio Show.

Does the IRS automatically notify the credit agencies upon release of the lien? If not, what do consumers need to do to make sure to update their credit files?

Answer: When the Certificate of Release gets filed in the courthouse where the lien was originally filed, theoretically the release should get picked up by the credit reporting agencies. A much better practice would be to order three official copies of the release and send them to the three credit bureaus. It could take months or years for them to be picked up by the agencies.

What if you find a tax lien on your credit file and don’t recognize it as yours? How do you research it to determine if it is valid?

Answer: This is one of the trickier tax lien questions to answer. What you would need to do is research the public records offices of every county that you have lived in since the issuance of the Federal Tax Lien. The official name for this records office varies by state. In Florida, it’s the Official Records of the Clerk of Circuit Court. In California, it’s called the Office of the Recorder. Some states have most if not all of these records online and some states have none of them online.

What if you find an old tax lien on your credit file and aren’t sure you have paid it? What is the procedure for investigating it with the IRS?

Answer: You can call the IRS to inquire, but this can sometimes exacerbate a problem that has long been dormant. The best way to investigate such a situation is to contact a tax professional. They should be well versed in handling tax controversy cases. Have them file a Freedom of Information Act request. This is a discreet way to inquire without setting the IRS Collection machine loose on a taxpayer.

What if you find an old tax lien on your credit file, believe you paid it but don’t have records anymore? What is the procedure for investigating it with the IRS?

Answer: Similar answer to question 4. You will have to check payment information with the IRS. It’s important to note that there is a 10-year statute of limitations for the collection of the tax. The 10 years begins from the assessment of the tax. There are many exceptions to this rule and circumstances that may extend the statute time. Sometimes significantly. This is another situation that is best left to a professional to decipher.

For more information on this tax lien questions topic see my post, “Tax Liens and What You Can Do to Revive Your Credit.

How long should you expect the above to take?

Answer: Such an analysis should take 60 -90 days. A lien release after a request 30-90 days.

What can you do to expedite the process if you are in the course of getting a mortgage, for example?

Answer: You could contact the Office of the Taxpayer Advocate for your local area. See the IRS website at www.irs.gov for the phone number for your local area. The Taxpayer Advocate is an independent branch of the IRS whose job it is to fix bureaucratic snarls and delays. There is no charge for their services. Using the Taxpayer Advocate can be advantageous, especially from the point of view that you get one person to help you instead of speaking to anyone who answers the phone.

Make sure to read my post, “What Do I Do When I Have a Tax Lien and I’m Trying to Sell My Home?

Are there any tips you would offer to consumers who find tax liens on their credit files?

Answer: Be cautious about contacting the IRS about tax liens that may pop up. You can wake the sleeping giant and turn your financial life into a living hell. It’s best to get professional help unless you are sure that you have paid off the lien and it’s just a matter of getting a release to resolve that issue.

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