Once the IRS files a notice of federal tax lien it will remain in effect until the taxpayer is in compliance with the IRS. In order to obtain a release tax lien a certificate of release from the IRS must be obtained. The IRS will need to ensure that the tax liability will be fulfilled in order to issue the release of lien. In the past it was rare that the IRS would grant or release tax lien without the liability, or back tax, being paid, but recent policy changes (February 2011) by the IRS states that taxpayers who enter into a direct debt installment agreement can have tax liens withdrawn in most cases. The actual amount of back taxes owed is taken into consideration. In the tax code the IRS states:
Section 6325(a) of the Internal Revenue Code directs us to release a Federal Tax Lien after a tax liability becomes fully paid or legally unenforceable. We also must release a lien when we accept a bond for payment of the tax. Your request must contain the following information: an Internal Revenue receipt; 2. a canceled check; or 3. any other acceptable proof. Please include a telephone number with the best time for us to call you should we need additional information. We may need to research your account to confirm you no longer have a liability. We will provide a release once we have done so.
The IRS will thoroughly research a request for tax lien release before a release of tax lien certificate will be issued. All back taxes, all tax filings, and a complete financial accounting must be completed to their satisfaction for the release of a tax lien. It will be up to the taxpayer to prove that the tax liability is excessive, or they are unable to pay, for the IRS consider the release of lien without the tax, penalties and interest being paid in full. Once all expenses, assets and income are documented, as well as taxes filed the amount and schedule of payment may be negotiated, and a release of lien granted, before the total liability is fulfilled. In certain circumstances the IRS may deem the back tax as uncollectible or only partially collectible and will release a tax lien for far less than the original lien amount.
While this new law helps to potentially lessen the damage of an IRS problem on the taxpayer, the best solution if you owe back taxes is to face the problem head on, before getting to this point where a lien is filed. When you owe back taxes IRS or need back taxes help there are resources including professional help that can eliminate the possibility of receiving an IRS tax lien. Tax settlement companies will be able to prevent tax liens before they occur. A good tax settlement company that negotiates with the IRS to come to an agreement for resolving back taxes can be the answer to preventing any damage to assets or credit, by tackling the problem before any liens are implemented.