Once the Federal Tax Links have been submitted, the next project will attempt to release them. Last year, the Internal Revenue Service submitted approximately 950,000 links. That number is expected to increase dramatically. Most of the taxpayers are at a loss and have a lot of misconceptions about how to get Federal Tax Links published. Here are 10 golden tips that cover almost every avenue to get you released from the dreaded federal tax lien.
1. Make sure you actually owe the tax and that the assessed tax is the correct amount. Don’t assume that what the IRS says you owe is correct. Compare your tax records with the actual IRS notice. If you didn’t file your own tax return, the IRS may have filed a substitute for the return, an SFR. Generally, the amount the IRS evaluates is much higher because they only give you the standard deductions. When this happens, fill out a correct tax return and send it to:
Fresno Campus ASFR
Drive stop 81304
P.O. Box 24015
Fresno, California 93779
This IRS unit processes the tax return now filed by the taxpayer. On filing the new tax return, send a cover letter requesting a “reconsideration.” This could take 3-5 months, so be patient.
2. Pay the tax in full as soon as possible. This is the fastest way to release the federal tax lien. If you pay with a cashier’s check, the IRS will immediately release the federal tax lien if you walk into a local office. Make sure you get a copy of the linking release and find out when the IRS will send a copy to your local court. You’ll also want to check with the credit bureaus within 30 days to make sure they posted the satisfaction of the disclosure on your credit report.
3. Present an offer in compromise under doubt as to the ability to collect. Pay the terms of the Offer in Compromise and the IRS will release the Federal Tax Lien once the Offer is paid in full and all terms are met.
4. Find out if the statute of limitations has expired in the tax years involved. The IRS has a 10-year period in which they must collect taxes. The 10-year period begins when the IRS conducts an assessment on the IRS computer. Usually this is 6 weeks after the returns are filed. If the statute period has expired, the link is automatically released by statute, but the IRS will not send a release. You will have to formally ask them for a copy of the release. If you would like a printed copy of the federal tax lien release after the statute has expired, fax your request to:
IRS centralized lien releases
Fax number 859-669-3805
5. Request a bond. The cost of the bond is very expensive, but the IRS will release the federal tax lien once the bond is posted to them. Generally, a bond equates to the settlement of the federal tax lien.
6. First, do not allow the federal tax lien to be filed. When the Notice of Intent to File is sent to you, call the IRS and request a hearing. This will at least delay the possible filing of the federal tax lien. You can give them the reasons why the link submission should not take place.
7. If there are special circumstances that would cause difficulties due to the filing of the federal tax lien, report it to the IRS. Difficulty situations can change the circumstances in most cases. The IRS will give due consideration to certain conditions.
8. Contact the Office of Taxpayer Advocates if you think there is a problem with the filing and you want the IRS to investigate the situation. The Taxpayer Advocates Office is at your disposal. Go to IRS.gov to find the nearest office.
9. If you realize you made a mistake on your own tax return and the obligation is incorrect, file an amended tax return so the IRS can correct the issuance of the Federal Tax Lien.
10. A professional tax resolution company is your best option to help you. A good tax resolution company with experienced professionals can solve these problems.
As a follow-up note, the federal tax lien is very bad for your credit score. Most lenders will not make loans in the presence of the federal tax lien. Do your best to never file the federal tax lien.