By: Law Office of Ray Haselman

Can IRS Liens Be Negotiated?

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Thousands of individuals and families each year find the terms in which they end their yearly dealings with the IRS to be less than ideal. They may owe several thousands of dollars in back taxes that they are unable to pay back.

Once a tax lien has been placed on the property of someone who is unable to pay back taxes, it may feel like the battle is lost. However, there are a few steps that a taxpayer can take to negotiate terms with the IRS if the terms are in the best interest of both the government agency and the taxpayer.

What Is An “Offer in Compromise?”

An offer in compromise may be a legitimate option if a taxpayer finds themselves unable to pay their entire tax liability; or if, by doing so, the taxpayer would put themselves into financial hardship. If the taxpayer applies for and is granted an offer in compromise, they will be allowed to settle their tax debt for less than the total amount owed.

The IRS considers the following set of circumstances and facts from the applying taxpayer:

  • Asset equity
  • Ability to pay
  • Income
  • Expenses

If the amount offered represents the most the IRS can expect to collect within a reasonable amount of time, the IRS generally approves an offer in compromise. Speak with a tax professional to best represent your individual situation, ensuring there is no miscommunication while negotiating your offer in compromise.

When Can You Ask For A Tax Lien Withdrawal?

When the IRS places a lien on a taxpayer, they send that person or entity a Notice of Federal Tax Lien. This official document assures that the IRS is not in competition with a creditor over your property.

You may request that the tax lien is withdrawn if any of the following situations are true:

  • The Notice of Federal Tax Lien was firmed improperly or premature
  • You negotiate with the IRS and prove that a lien withdrawal will allow you to pay more toward the tax debt
  • You’ve paid off your tax debt, the tax lien has been released, and you’ve been in tax compliance for three straight years
  •  You’ve entered into installments to pay back tax debt

Negotiating with the IRS to remove the Notice of Federal Tax Lien from the public record will make it easier to sell your home, refinance, or get a second mortgage. Though, the lien withdrawal does not negate your tax liability. You must still pay the remaining balance.

Who Can Help Negotiate With The IRS Over Tax Liens?

If you find yourself facing a tax lien and needing to negotiate with the IRS, who has access to numerous tax lawyers themselves, reach out to your tax professional. An attorney with a background in tax law can help you negotiate with the IRS over claims ranging from back taxes, tax liens, levies, and anything in between. Additionally, speaking early and often with the right tax preparer can help to prevent the situation from ever happening. When you’re ready to put yourself in the position to succeed, call us at 786-522-0410 and schedule a consultation.