Established Contributor
Crossdivided
Posts: 534
Registered: ‎01-23-2013
Re: Tax Liens

I am not a licensed tax attorney, nor a tax professional. All information below is from personal experience only.

 

Ok so with the disclaimer out of the way lol...

 

Well, you are talking about several different things here:

 

1. IRS FORM 433-F (collections statement)
Go to irs.gov and pull it up. Follow the instructions. Long story short, the end result is the amount the irs will let you "live on". They will want the balance of that, your "disposable income" so to speak. If the there is none, you will be "currently not collectable", and theyll leave you alone.

 

2. OIC (offer in compromise)

OK so now is the big kicker...you send them an offer and they decide yes or no on settling...BUT you must include X% as good faith at time of offer (10% or 20% range). If they say no they keep it anyway and apply it to the tax debt. I have read on numerous tax attorney forums etc over the last few years that the magic formula was 433 amount (see above) x24 months + 80% of property value (excluding residence). The 80% may not be right...its whatever "short sales" are considered to be, but its in that range. This would pay the debt, but not remove the lien on CR (but would be satisfied).

 

3. DDIA (direct debit installment agreement)

To my knowledge the ONLY way to completely remove a tax lien entry, as if it never existed, is through a DDIA. Long story short, thats just a payment plan (based on 433-F amount, or even less if under certain debt amounts) that they directly debit from your bank acct. After 3 consecutive payments from acct they will remove the entry (youll have to google the form number for that). Im sure its prob a few months after that to actually see it on CR, you know how slow these things can be. Just processing time.

 

Anyway thats all I got. More up-to-date info on the net im sure. If you can afford it, I would get a tax attorney to do all this for you. Trust me, doing it all yourself is time consuming and somewhat frustrating, but it IS doable.