Text Size

How to Get a Tax Lien Removed

An IRS lien can remain in place for up to 10 years, meaning you face a decade of bad credit and financial instability. You're unable to do anything involving credit when you have an IRS lien: buy a house, get a new credit card, or even sign a lease. But there are ways you can get your IRS lien lifted. Read on to learn how.

Removing Your IRS Lien with a Lump Sum Payment

The fastest and most effective way of removing an IRS lien is to make a lump sum payment on your entire tax debt. The purpose of an IRS lien is for the government to guarantee repayment of your tax debt, so a lump sum payment will get them off your back quickly and for good. If you're unable to afford a lump sum payment on your own, it's often recommended that you borrow money from friends and family who (hopefully) won't charge you penalties and interest like the IRS does.

You can also get a loan from the bank to pay off your IRS tax debt, though you'll first have to make your case to the government to lift your IRS lien to be able to get the loan (remember that an IRS lien negatively affects your credit). This shouldn't be difficult to do, as your getting a bank loan will, in turn, help the IRS get their money faster. Plus, as an upside for you, the interest on bank loans are always less than the interest on IRS back tax debt.

Removing Your IRS Lien with an Installment Agreement

In February 2011, the IRS announced changes to its IRS lien policies, including making an IRS lien removal possible for qualifying taxpayers who meet eligibility requirements. Previously, an IRS lien would stay in place until your entire tax debt was paid off, even if you had entered into an Installment Agreement. Now, if you're an individual with Form 1040 tax debt, a business with income tax liability only, or an out-of-business entity with any type of tax debt, you can get your IRS lien removed after entering into a Direct Debit Installment Agreement if you meet the following requirements:

  • You owe $25,000 or less. If you owe more than $25,000, you can pay your debt down to $25,000, then request an IRS lien removal.
  • Your Direct Debit Installment Agreement will pay your tax debt in full within 60 months or before the Statute of Limitations expires, whichever is first.
  • You are in full compliance in every other way with the IRS.
  • You have made 3 consecutive direct debit payments.
  • You have not previously received a lien removal for the same tax debt unless it was for an improper filing of the IRS lien.
  • You have not defaulted on your current, or any previous, Direct Debit Installment Agreement.

Removing Your IRS Lien with an Offer in Compromise

If you meet the requirements to settle your IRS back tax debt with an Offer in Compromise, you're in a better position than ever. Not only will you be able to settle your back taxes for less than you actually owe, but your IRS lien will be automatically removed once your Offer in Compromise application is accepted and your offered amount is paid in full.

Are you in danger of an IRS lien? You must take action now before your IRS lien results in tax levies and asset seizures. Contact the IRS immediately and find a tax preparer professional to help sift through the paperwork.