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How To Remove a Tax Lien

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Authored by Douglas Mefford in Taxes
Published on 05-11-2009

If the Internal Revenue Service determines that you owe them taxes that you have not paid, they have the option of placing a tax lien against any and all property you may have. This can severely and negatively impact your credit rating and ability to buy or sell so long as the tax lien is in place. If you have been subjected to such a proceeding, it is imperative to regaining your ability to do credit business or even own property again to get the lien removed.

One way to deal with the tax lien is to ignore it and allow the statute of limitations to run out on it. This will require a wait of as much as ten years. This method of removing your tax lien is also dependant upon the Internal Revenue Service not acting upon the lien in that time. You must also gamble on whether or not the tax lien is extended before the expiration date. Even if the tax lien does expire and you no longer are required to pay the tax and penalties, the notation of the lien will remain on your credit report permanently and will affect future attempts at getting credit.

The easiest way to remove a tax lien is, of course, paying the amount of tax the Internal Revenue Service says is due them. Once you have paid the full amount of the money they say is owed them, you should be able to have the lien notice removed from your credit report in as little as thirty days. For future reference and safety’s sake, be sure to get a certified copy of your payment receipt as proof you have paid. This way you can not only prove it should be off your record but will also help prevent the Internal Revenue Service from charging you the same tax a second time.

It is not always an easy thing to come up with the sums of money that they may require of you to get a tax lien removed. You do have the option of getting with them to see if you can work out some form of repayment deal. Since there is a point at which prosecution of a tax lien may cost them more than the amount they may recover, they may be willing to accept payments until the full amount is paid.

An Offer of Compromise is another option for the citizen who has run afoul of the Internal Revenue Service and has a tax lien placed against them. This strategy is best attempted with the aid of a professional tax consultant or CPA as it can be a tricky operation. The ultimate outcome is that, if you have calculated well, the Internal Revenue Service may accept a lesser amount than what is owed as it will still represent more than they would have expected to get anyway. The greatest advantage is that by negotiating a successful Offer of Compromise, you will have the lien report removed from your credit report and the black mark eliminated.

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