Facing an IRS tax lien can be overwhelming, and receiving a notice that your request for lien removal has been denied adds to the stress. It’s essential to understand that a denied request isn’t the end of the road. Knowing what steps to take next and how to prepare can make a significant difference in resolving your tax situation.
This guide will walk you through the necessary actions and explain how a tax lien attorney can assist you in managing this complex process.
Why Your IRS Tax Lien Removal Request Was denied
Before moving forward, it’s important to understand why the Internal Revenue Service tax lien removal request was denied. Common reasons include:
Incomplete Compliance: The IRS may have found that you haven’t filed all required tax returns or that you’re not current with your tax payments.
Insufficient Grounds: The reasons provided in your request might not meet the IRS criteria for lien withdrawal or release.
Errors in Application: Mistakes or omissions in your application can lead to a denial.
Financial Analysis: The IRS may have determined that your financial situation doesn’t warrant lien removal at this time.
Immediate Steps to Take After a Tax Lien Decline
Review the IRS Notice Carefully
Begin by reading the notice from the IRS thoroughly. It will outline the reasons for the decline and any deadlines for appeals or additional actions. This information is vital for planning your next steps.
Consult a Tax Lien Attorney
Engaging a knowledgeable tax lien lawyer is important at this stage. An experienced tax lien attorney can interpret the IRS’s decision, advise you on your options, and represent you in further communications. He can help you avoid missteps that could worsen your situation.
Need immediate assistance with your federal tax lien? Contact our experienced tax lien attorneys at (877) 845-2460 or visit J. David Tax Law.
Ensure Compliance with Tax Obligations
Verify that you’ve filed all required tax returns and that you’re current on any tax payments. Compliance is a critical factor in any negotiations with the IRS. If you’re behind, take immediate steps to rectify this.
Gather Necessary Documentation
Collect all relevant documents, including:
IRS notices and correspondence
Tax returns
Financial statements
Proof of payments
Having these documents organized will facilitate any appeals or negotiations.
Explore Other Tax Debt ResolutionOptions
Despite the initial setback, there are still avenues to address your IRS tax lien.
Appeal the IRS Decision
You have the right to appeal the IRS’s decision. An appeal allows you to present additional information or correct any misunderstandings. There are two primary avenues for appeal:
Collection Due Process (CDP) Hearing: This is a formal process where you can dispute the lien and propose alternatives. It provides an opportunity to discuss your situation with an independent IRS Office of Appeals.
Collection Appeals Program (CAP): This program allows for a quicker appeal but may have limitations on the issues that can be raised.
Our tax lien lawyer can guide you through the appeals process, ensuring that your case is presented effectively and that all procedural requirements are met.
Negotiate an Installment Agreement
Setting up a payment plan with the IRS can sometimes lead to the withdrawal of the federal tax lien. There are different types of installment agreements:
Guaranteed Installment Agreement: For debts of $10,000 or less, payable within three years.
Streamlined Installment Agreement: For debts up to $50,000, payable within six years.
Partial Payment Installment Agreement: Allows for lower monthly payments but may extend the repayment period.
Negotiating terms that fit your financial situation is essential, and a tax lien attorney can help facilitate this. In some cases, entering into a Direct Debit Installment Agreement (DDIA), where payments are automatically withdrawn from your bank account, can increase the likelihood of the IRS withdrawing the lien.
Submit an Offer in Compromise
An Offer in Compromise allows you to settle your tax debt for less than the full amount owed. The IRS will consider factors like your ability to pay, income, expenses, and asset equity.
Eligibility: Not everyone qualifies; the IRS will evaluate your entire financial situation to determine eligibility.
Application Process: Requires detailed financial disclosure and a non-refundable application fee.
Read our success stories to see how our skilled tax debt attorneys have successfully negotiated Offers in Compromise, reducing tax debts by more than half.
Request Lien Subordination or Discharge
If lien withdrawal isn’t an option, consider:
Lien Subordination: This doesn’t remove the lien but allows other creditors to take priority, which can help you secure loans or refinancing. It’s useful if you need financing to pay the tax debt.
Lien Discharge: Removes the lien from specific property, allowing you to sell assets. This can be beneficial if selling the asset will help pay off the tax debt.
Consider Currently Not Collectible (CNC) Status
If you’re facing significant financial hardship, you might qualify for Currently Not Collectible status. This means the IRS temporarily suspends collection efforts, including the enforcement of tax liens. While interest and penalties will continue to accrue, it can provide temporary relief.
Your path to financial freedom starts with a single step. Contact us for a free consultation and let our expert tax lien lawyers attorneys guide you.
What is a State Tax Lien?
While dealing with federal tax issues, don’t overlook potential state tax obligations. A state tax lien is similar to a federal lien but imposed by state tax authorities. The procedures for resolving state liens can differ from federal ones.
Resolution Process: Each state has its own rules and procedures. Consulting a tax lien lawyer familiar with your state’s laws is essential to address these liens effectively.
Avoiding 3 Common Mistakes in Tax Lien Removal
Don’t Ignore IRS Notices
Failing to respond can lead to more severe consequences, including tax levies on your bank accounts or wages. Always address any correspondence promptly.
Avoid Inaccurate Information
Providing false or incomplete information can harm your credibility and worsen your situation. Ensure all the information you provide is accurate and complete.
Don’t Go At It Alone
Handling complex tax matters without professional help can be risky. An experienced tax lien attorney can guide you through the process, help you understand your rights, and work towards the best possible outcome.
Preventing Future Tax Liens
Stay Current with Tax Filings and Payments
File all required tax returns on time and pay any taxes owed to avoid future liens. If you anticipate difficulty in paying, consider setting up a payment plan early.
Communicate Proactively with the IRS
If you’re unable to pay your taxes, contact the IRS to discuss payment options before a lien is filed. Proactive communication can sometimes prevent enforcement actions.
Regularly Monitor Your Tax Account
Keep an eye on your IRS account to catch any issues early. Regular monitoring can help you stay informed about your tax obligations and any potential problems.
Conclusion
Receiving a decline on your IRS tax lien removal request can be overwhelming, but it’s not the end of the road. By understanding why the request was denied and exploring the options available, you can take proactive steps toward resolving the issue.Professional assistance similar to that offered by J. David Tax Law can significantly impact the outcome, providing expert guidance and representation throughout the process.
Don’t let a denied IRS tax lien stop you from moving forward. Call (877) 845-2460 to speak with an experienced tax lien lawyer who can help you take the next steps confidently towards a lien resolution.
Your Tax Relief Questions, Answered
- Lien Release: Occurs when the tax debt is paid, and the IRS releases its claim on your property. The lien is satisfied, but the record of the lien may remain in public records.
- Lien Withdrawal: Removes the public Notice of Federal Tax Lien, as if it was never filed. This can help restore your credit and is often more beneficial than a release.
