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IRS Tax Lien Withdrawal Process Question

Regular Contributor

IRS Tax Lien Withdrawal Process Question

The IRS issued a tax lien on me in 2014 for $75,000.  I pay $1425 every month and the balance is now about $51,000.  With a commission check coming at the end of January for about $40,000, I am considering taking $26,000 of it to get the balance under the $25,000 threshold and then set up automatic withdrawals each month.  My understanding is that after 3 months, they will withdraw the lien.

However, I'm still considering my options on what to do with the money (credit cards, emergency savings, pay off a car loan among my options.)

My question is, do the three automatic payments need to occur AFTER the balance hits the $25,000 mark, or if I set up automatic payments now, let those occur for three months and then at some point in the future get the balance down to the $25,000 mark, will that work too?  In other words, had I set these payments up three months ago would I be in a position now to get rid of the lien when I get the balance to the $25,000 mark?

I've reaad the IRS website but can't seem to find definitive wording on this.

If anybody has experience with this, any advice appreciated!

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Message 1 of 9
8 REPLIES
Frequent Contributor

Re: IRS Tax Lien Withdrawal Process Question

Have you read about IRS Fresh Start Program?

https://www.irs.gov/uac/New-IRS-Fresh-Start-Initiative-Helps-Taxpayers-Who-Owe-Taxes
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Message 2 of 9
Regular Contributor

Re: IRS Tax Lien Withdrawal Process Question


SacTownGuy wrote:
Have you read about IRS Fresh Start Program?

https://www.irs.gov/uac/New-IRS-Fresh-Start-Initiative-Helps-Taxpayers-Who-Owe-Taxes

Yes, I have, but that doesn't contain the answer to my question about the mechanics of getting a lien released.  Thanks for the response, though.

Message 3 of 9
New Contributor

Re: IRS Tax Lien Withdrawal Process Question

Hi, I recently had this issue. Owed about 54k, etc. on Fed taxes to IRS and had been making payments for awhile. Wanted to get the tax liens withdrawn but still owed about 48k. For me it was scary and traumatizing to get on the phone w/the IRS, but frankly it was the best thing. Here's what happened in my case: I found out that if I got under the "25k" owed that I would qualify for the Fresh Start program, and then they withdrew my tax liens (so they don't show on public records or your credit report....).  Here is the kicker, by reading online, I thought I would not qualify as I was owing so much more than 25k. But it turned out that I only owed 32k or so in actual principal taxes...the rest was late fees, penalties, etc. So the IRS agent let me know if I could come up with $7500 lump sum to get the principal under 25k, they would put me on the Fresh start, where pays come out automatically monthly from your bank account and the tax liens would be withdrawn. So I was able to come up with that $7500, and get the principal under 25k, and now I pay $700/mo. They set up the amount so that I would have it paid off in less than 60 months. They were on the ball with collecting the $7500 and applying it, and sending me the letters for the lien withdrawal. Then I sent those letters to the 3 CRAs. Took about 2-3 months from first talking w/IRS to getting them off the CRAs. You can do it!!  (I was already on a payment plan for a higher monthly amount, so I didn't have any issue of waiting for 3 months of pays before the withdrawal....)  Good Luck!  Hopefully you will get a nice IRS agent like I did...they seemed to respond to "I feel so bad, I really want to clear this up...."  And HOPEFULLY, you can get on the Fresh Start with paying Less money down like I did....if you owe penalties and interest.

Message 4 of 9
New Contributor

Re: IRS Tax Lien Withdrawal Process Question

So I wouldn't "offer" them 26k...I would first find out "what would I need to pay to qualify for Fresh Start....I might be coming up with some money soon...."  And yes, for me at least, the auto pays I had set up previously counted so I didn't have to wait 3 more months for the withdrawal.  That would give you the chance to pay the IRS only what you have to and leave some other money for your other $$$ goals.

Message 5 of 9
Regular Contributor

Re: IRS Tax Lien Withdrawal Process Question


frankie911 wrote:

Hi, I recently had this issue. Owed about 54k, etc. on Fed taxes to IRS and had been making payments for awhile. Wanted to get the tax liens withdrawn but still owed about 48k. For me it was scary and traumatizing to get on the phone w/the IRS, but frankly it was the best thing. Here's what happened in my case: I found out that if I got under the "25k" owed that I would qualify for the Fresh Start program, and then they withdrew my tax liens (so they don't show on public records or your credit report....).  Here is the kicker, by reading online, I thought I would not qualify as I was owing so much more than 25k. But it turned out that I only owed 32k or so in actual principal taxes...the rest was late fees, penalties, etc. So the IRS agent let me know if I could come up with $7500 lump sum to get the principal under 25k, they would put me on the Fresh start, where pays come out automatically monthly from your bank account and the tax liens would be withdrawn. So I was able to come up with that $7500, and get the principal under 25k, and now I pay $700/mo. They set up the amount so that I would have it paid off in less than 60 months. They were on the ball with collecting the $7500 and applying it, and sending me the letters for the lien withdrawal. Then I sent those letters to the 3 CRAs. Took about 2-3 months from first talking w/IRS to getting them off the CRAs. You can do it!!  (I was already on a payment plan for a higher monthly amount, so I didn't have any issue of waiting for 3 months of pays before the withdrawal....)  Good Luck!  Hopefully you will get a nice IRS agent like I did...they seemed to respond to "I feel so bad, I really want to clear this up...."  And HOPEFULLY, you can get on the Fresh Start with paying Less money down like I did....if you owe penalties and interest.


Wow, this is incredibly helpful.  Thanks a lot.  I wonder as I've been paying against what I owe if they apply it first to principal and then to penalties and interest?  I'm going to try to call them tomorrow (although being the first business day of the year I probably won't have much success), but definitely this week and see what I can accomplish.

 

Awesome...thanks again.

Message 6 of 9
New Contributor

Re: IRS Tax Lien Withdrawal Process Question

nyc, best of luck with it. My phone call with them was over an hour of waiting on hold, having them check something and put me on hold again, off and on for over an hour so be ready to wait, have your phone charged up LOL and hope it goes your way!

Message 7 of 9
Regular Contributor

Re: IRS Tax Lien Withdrawal Process Question


frankie911 wrote:

nyc, best of luck with it. My phone call with them was over an hour of waiting on hold, having them check something and put me on hold again, off and on for over an hour so be ready to wait, have your phone charged up LOL and hope it goes your way!


Yeah, I know how hard it can be to get them on the phone.  I might not even try tomorrow but wait until they aren't as swamped as I suspect they will be first day of the new year.

 

I have now made 22 consecutive on time payments against my installement agreement, for a total of $31,350 paid since March of 2014.  I don't know if that would factor into my request at all, but given I haven't been late or missed a payment in nearly two years now can't hurt anyway.

Message 8 of 9
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Community Leader
Senior Contributor

Re: IRS Tax Lien Withdrawal Process Question

Best of luck.  I am another that has waited many hours to handle a Fed Lien.

 

I found this on the net somewhere and it did shorten the wait times on occasion...

 

    "...advises that people call the I.R.S.  Tuesday through Thursday and suggests avoiding 8 a.m. to 9 a.m., and 4 p.m. to 5 p.m., in all time zones. It also helps to be polite and have any relevant documents handy when you call."


Message 9 of 9