What is an IRS lien?A lien is a public document, filed by the IRS to let any creditors know that they (the IRS have a claim staked against you, and they have a legal right to your property. This can definitely turn lenders off, and they will be less likely to give you any credit as a result.
How to lift an IRS lien:
- Pay your tax debt in full – If you pay your tax debt in full, the IRS will release the lien against within 30 days of payment. This is the easiest resolution, if you can come up with money.
- Subordination – This does not lift a lien, but it does make it easier to refinance your home, or get a mortgage. It basically allows other creditors to move ahead of the IRS, possibly making it easier to get approved.
- Discharge of property – A discharge of property removes a lien from a specific piece of property. This has a few different areas that can be considered, with the most important one being, that the IRS wants to get their money. They may allow a discharge of property, if they receive some of the money in return. Of course, there are other stipulations involved.
- Withdrawal – This removes the IRS tax lien and assures creditors that they are not competing for your property. A withdrawal may be issued, if the full amount owed has been paid, you are current on all taxes, and have a 3-year clear history of your taxes. Another way is if you enter into a direct debit installment agreement with the IRS. There are several qualifications to be considered for this, and the withdrawal will not take effect until the debt is satisfied.
- Offer in compromise – If you are having a financial hardship, but can satisfy some of the tax debt you owe, you may qualify for an Offer in Compromise. This is where you make a fair offer to the IRS with a 20% down payment, and wait to see if the IRS accepts your agreement. Here is more information on Offer in Compromise.
REMOVING YOUR IRS LIEN.