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?

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. Furthermore, the lien withdrawal removes the Public Notice of Federal Tax Lien from the asset in question. In other words, the IRS is no longer in competition with other creditors. Moreover, you may be eligible for a Lien Withdrawal if you have entered into a direct debit installment agreement. Another method is to come to some sort of an agreement regarding your tax debt with the IRS.

How Can I Become Eligible?

For starters, the IRS allows for 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. Another option: your regular installment agreement was converted into a direct debit installment agreement.

According to the IRS, you can use this option if you/your:

are a qualifying taxpayer (i.e. individuals, businesses with income tax liability only, and out-of-business entities with any type of tax debt)
owe $25,000 or less (balances must be paid down to $25,000 prior to requesting withdrawal of the Notice of Federal Tax Lien)
are in full compliance with other filing and payment requirements
have made three consecutive direct debit payments
have not defaulted on your current or any previous Direct Debit Installment Agreement
Direct Debit Installment Agreement pays the full amount owed within 60 months or before the Collection Statute expires

Other Options for Tax Lien Withdrawal

First of all, an application requesting a lien withdrawal is filed with the IRS.

To continue, here is a list of other criteria for eligibility besides the above options:

You can provide evidence the tax lien was not in accordance with IRS procedures or 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. Moreover, you must list the financial institutions to be notified of the withdrawal of the tax lien. In conclusion, lien withdrawals can be very complicated. The best advice is to consult a tax professional to prevent any missteps. 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. This true 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:

A public notice of a federal tax lien on your assets renders them undesirable to buyers and creditors. Applying for a tax lien withdrawal may be the best option if you are wanting to sell these assets.

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. Call today to consult with a tax professional about your situation.