What is a notice of federal tax lien?

Notice Of Federal Tax Lien

After the IRS has exhausted all attempts to collect your unpaid taxes, the enforced collection process begins. You have already received a Notice of Demand for Payment and have either not contacted the IRS or paid the Notice. You have been given 10 days to do either of these events.

Filing. It is at this point that the IRS will file the Notice of Federal Tax Lien in your county's public records. As mentioned in other sections, the Notice of Federal Tax Lien filing gives notice to all concerned parties that the IRS has a claim against any or all of your property. It gives the IRS priority over other creditors you may have.

IRS federal laws require them to notify you within five days of the filing date for your lien. You will receive this notice:

  • In person, face to face
  • By certified or registered mail
  • Have it left at your home or usual place of business
Discharge. You can have your Notice of Federal Tax Lien discharged when you do not have ownership of the affected property anymore. This applies, for instance, when you sell your property. When this happens, you need to apply for a Certificate of Discharge.

As with most IRS tax laws, there are certain conditions and limitations that apply to a Certificate of Discharge.

For more information on this process and Certificate, IRS Publication 783 will be useful to you. This Publication is titled ‘Instructions on How to Apply for a Certificate of Discharge of Property from the Federal Tax Lien.

Legalities. The IRS will withdraw your Notice of Federal Tax Lien when any of the following happen:

  • IRS procedures were not followed during the filing process of your Notice.
  • The IRS can collect the unpaid taxes quicker by not filing the Notice.
  • You have entered into an installment agreement to pay your back taxes.
  • The withdrawal is in the best interests of both the government and you. This is determined by the Taxpayer Advocate who would contact for any concerns about the tax lien.
The IRS will provide you with a copy of the withdrawal. You can also ask them to send a copy to any other institutions, if desired.

Contact. The IRS has a special unit set up to deal with tax liens. It is known as the Centralized Lien Unit. You can reach them at 1-800-913-6050 if you have questions regarding basic lien inquiries such as routine lien releases and lien payoff amounts.

Payoff. You can request a payoff amount for your federal tax lien. Simply call the Centralized Lien Unit at 1-800-913-6050 to receive an updated lien payoff amount. At this point an IRS employee will issue you a letter containing the current amount (payoff amount) that must be paid before your Notice of Federal Tax Lien is released.

Release. Your Notice of Federal Tax Lien will be released with you pay the entire amount in full.

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