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Regular Contributor
Posts: 123
Registered: ‎01-15-2009
0

Released Federal Tax Lien - Form 12277 Rejected!

[ Edited ]

I had a 2007 tax lien that was paid off last year, and released. So, following the advice on here, I completed Form 12277 and mailed that with the release documentation.

 

A week passed...and yesterday, I received a letter stating:

 

"In Febuary 2011, new criteria were added for withdrawing a Notice of Federal Tax Lien after it is fully satisfied and released. Following are the criteria that must be met in order to qualify for a withdrawal of the Notice of Federal Tax Lien in this situation:

 

-The taxpayer requests the withdrawal in writing;

(there is a note stating that form 12277 iis desired, but is not required)

-The taxpayer fully satisfied the liabilities on the NFTL;

-A certificate of release was issued; and

-The taxpayer is in compliance with filing requirements.

 

For purposes of this memorandum, "in compliance with filing requirements" includes:

-All required Individual Master File (IMF) and Business Master File (BMF) returns, including information returns, for the prior three years have been filed; and Current Estimated Tax Payments and Federal Tax Deposits (FTDs) have been paid

 

Your 2012 Income Tax account shows that no Estimated Tax payments have been made for the year. Your 2011 Form 1040 showed a balance due of about $1,226 when the return was filed. If your 2012 liability and withholding are about the same as 2011 you should have made an Estimated Tax payment April 17, 2012.

 

(the note then goes on to explain about the CAP (Collection Appeal Process), and how to do that.)

 

I am SOOOO confused. I have filed all of my taxes timely. I work 1 place, for 1 employer, and get 1 W-2 each year on which all of my income is reported. I have never been self-employed, and I have never owned a business, and yet, the rejection notice that I received came from the Small Business/Self-Employed Division. I did have a balance due of $1226 as of the filing date of April 14, but I enclosed a check for $226, and made a proposal to the IRS to pay the remaining $1,000 by Aug. 21, 2012 (I do have the follow-up letter from the IRS stating that they did accept this proposal).

 

The reason why my taxes due were so high is that 1 of my kids is a junior in college and is now living in her own apt. and paying all of her own bills. Unfortunately, due to my confusion about college students and about what it means to be "independent," and my ignorance about the 6-month residency rule, I did not update my withholding certificate to decrease my claimed exemptions until Jan. of this year. As of Jan. 2012, my 2012 withholding IS different than my 2011 withholding (-1 dependent). Why, for goodness' sake, should I now need to be making estimated tax payments, when I know that I should not have to owe any additional money next tax year, anyway? 

 

The guy who sent me this's name and phone # are in the letter; I left a voicemail, and will call again today. But if anyone here has been through a similar experience, I'd appreciate it if you could post about it, and about what you did to (hopefully) get the desired approval of your Form 12277.

All 3 bureaus (per Amex CreditSecure FAKO) are still 748 (as of 12/19/13). Cards: Discover It, $12,100, Chase Freedom $3,300, Chase Amazon $1,500, Walmart store $11,000, AMEX Zync NPSL, Costco Amex $14,700. US. Bank Cash +, $5,000. AMEX SPG $6,000, PenFed Plat. Cash Rewards $17,500, PenFed P-LOC $10,000, Citi Forward $5,100, Chase Slate $5,000, Old Navy, $2,200.
Regular Contributor
Posts: 123
Registered: ‎01-15-2009
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Re: Released Federal Tax Lien - Form 12277 Rejected!

[ Edited ]

IRS told me to send my last paystub, and they will compare my current exemptions to last year's. Last year, I had 6. This year in January, I had this decreased down to 4. After they verify my documentation, IRS promises to re-examine my file for the Form 12277 approval.

All 3 bureaus (per Amex CreditSecure FAKO) are still 748 (as of 12/19/13). Cards: Discover It, $12,100, Chase Freedom $3,300, Chase Amazon $1,500, Walmart store $11,000, AMEX Zync NPSL, Costco Amex $14,700. US. Bank Cash +, $5,000. AMEX SPG $6,000, PenFed Plat. Cash Rewards $17,500, PenFed P-LOC $10,000, Citi Forward $5,100, Chase Slate $5,000, Old Navy, $2,200.
Regular Contributor
Posts: 123
Registered: ‎01-15-2009
0

Re: Released Federal Tax Lien - Form 12277 Rejected!

IRS said that they were concerned that my 2012 withholding level was too low. I pointed out the fact that in Jan. 2012, due to losing a dependent (my college kid moved out on his own), that I had already decreased my 2012 claimed exemptions by 2). I provided Dec. 2011 and Jan. 2012 pay stubs as proof, and IRS guy said that he has changed his mind and that he will approve it now! Woo-hoo!!! Learning for all - IF you plan to get a fed tax lien released using this new forgiveness program , then in the next April 15 tax season, you CANNOT be projected to be owing the Feds ANY money more than the amounts than they're already withholding through your paychecks. If you routinely write the Feds a check each April 15, even for only $20 or so, this makes you ineligible for meeting the Form 12277 release requirements . Fill out a W-4 worksheet beforehand, and have your employer adjust accordingly, before you file!
All 3 bureaus (per Amex CreditSecure FAKO) are still 748 (as of 12/19/13). Cards: Discover It, $12,100, Chase Freedom $3,300, Chase Amazon $1,500, Walmart store $11,000, AMEX Zync NPSL, Costco Amex $14,700. US. Bank Cash +, $5,000. AMEX SPG $6,000, PenFed Plat. Cash Rewards $17,500, PenFed P-LOC $10,000, Citi Forward $5,100, Chase Slate $5,000, Old Navy, $2,200.
Established Member
Posts: 18
Registered: ‎03-29-2012
0

Re: Released Federal Tax Lien - Form 12277 Rejected!

I have my release and was about to send in the withdrawal but will probably owe again this yr. I will keep u posted


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Established Member
Posts: 18
Registered: ‎03-29-2012
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Re: Released Federal Tax Lien - Form 12277 Rejected!

How many points did your score increase once the tax lien was removed?  


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Regular Contributor
Posts: 123
Registered: ‎01-15-2009
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Re: Released Federal Tax Lien - Form 12277 Rejected!

[ Edited ]

Sadly,, I didn't print and retain  any reports generated during that time period, but I recall gaining 70 - 80 points for the lien deletion. I was at about 580 while it was still reporting. Subsequently got my last baddie, a medical collection, off later that fall, bringing me to my present scores and the ability to apply for Amex, Discover, and Chase brands....as well as get a decent car loan rate!

All 3 bureaus (per Amex CreditSecure FAKO) are still 748 (as of 12/19/13). Cards: Discover It, $12,100, Chase Freedom $3,300, Chase Amazon $1,500, Walmart store $11,000, AMEX Zync NPSL, Costco Amex $14,700. US. Bank Cash +, $5,000. AMEX SPG $6,000, PenFed Plat. Cash Rewards $17,500, PenFed P-LOC $10,000, Citi Forward $5,100, Chase Slate $5,000, Old Navy, $2,200.
Regular Contributor
Posts: 123
Registered: ‎01-15-2009
0

Re: Released Federal Tax Lien - Form 12277 Rejected!

[ Edited ]

Yes, please do! I hope that you get a lenient and not a LIENient (pun intended, hah, hah) tax person, or at least someone who is a bit more lenient than the man who reviewed my file. I thought that it was a bit ridiculous that I had lost 1 kid but had stopped claiming 2 exemptions, holding the same exact job and the same pay as the previous year, and yet it was debatable about whether I would be playing sufficient taxes .... Especially since they have always owed ME money, and not the other way around!

All 3 bureaus (per Amex CreditSecure FAKO) are still 748 (as of 12/19/13). Cards: Discover It, $12,100, Chase Freedom $3,300, Chase Amazon $1,500, Walmart store $11,000, AMEX Zync NPSL, Costco Amex $14,700. US. Bank Cash +, $5,000. AMEX SPG $6,000, PenFed Plat. Cash Rewards $17,500, PenFed P-LOC $10,000, Citi Forward $5,100, Chase Slate $5,000, Old Navy, $2,200.
Valued Contributor
Posts: 1,072
Registered: ‎02-06-2013
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Re: Released Federal Tax Lien - Form 12277 Rejected!

    Uh... I sent my form 12277 in on Feb 7th. I just got it back. They said I sent it to the wrong place ugh. It turn out I needed to send it to the place that corresponds to where I reside now not to the place where I resided when it was filed. I was confused and thought that I had to send the nfo to Chiago since my lien was filed in Cook County Court.... Oh well, I resent it out yesterday which was pretty much 1 month since I originally sent it out. I guess no one said this was gonna be easy but if I can get my lien taken off my credit reports, I know my score will jump up so it is worth it.

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Re: Released Federal Tax Lien - Form 12277 Rejected!

Good luck to you!



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