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Federal Tax Lien Relief

Economic times are difficult. The Internal Revenue Service (IRS) has implemented an expedited process that will make it easier for financially distressed homeowners to avoid a federal tax lien which would block the refinancing of mortgages or the sale of a home.

In some cases, the IRS will move a tax lien to second position to allow for the refinancing of a mortgage to go through while, in other situations, the IRS may discharge a tax lien to allow the sale of a home to proceed if the home is being sold for less than the loan amount.

On average, it takes 30 days to apply for and receive a discharge or subordination of a federal tax lien. There are currently over a million outstanding federal tax liens tied to real and personal property.

More information about the Federal Tax Lien

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IRS will seek fewer liens on delinquent tax payers; enables installment plans for businesses to pay taxes.

During the 2010 fiscal year, the IRS has filed nearly 1.1 million property liens--compared to 426,000 during 2001. Property liens are recorded with the local deed or land records office (many times with the Clerk of the Circuit Court office). This assures the federal government the payment of taxes due when the property gets sold. Liens also make it more difficult to obtain credit from potential creditors. Liens can hurt the tax payer's or a business's credit report for years to come, thus making it more difficult to qualify for a new loan or even obtain new employment.

According to the Revenue Agency they are changing this to assist struggling tax payers with their tax payments. Under a new policy a lien with be placed if a tax payer owes at least $10,000 in back taxes (previously this barrier was at $5,000). Furthermore, it will be easier to eliminate the lien from the tax payer's record once the tax bill has been paid or installment payments have started; one of the criteria to reduce tax debt is based on certain income and debt requirements.

Find ways to pay for your taxes through tax installment payments.