Tax Lien Removal
Tax Lien Removal for Individuals or Businesses
According to the IRS, a tax lien is “the government’s legal claim against your property when you neglect or fail to pay a tax debt.” At O’Bryan Law Offices, we’re here to guide you through the best legal options to remove a tax lien. Our experienced tax attorneys will prepare the best plan for your situation to get your life back on track.
Call today at 502-400-4020 to set up your consultation or fill out our online intake form.
State Tax Lien Removal
The state of Kentucky may place a lien, or claim, on your property if you fail to pay your tax debts. Examples of claims include those on your home, any real estate, boats, accounts receivable, and more. The state files a tax lien notice within the county where your business or residence is located.
The Kentucky State Department of Revenue must meet these requirements before it files a Notice of State Tax Lien.
- The state must prepare a Notice of Tax Due for these reasons.
- The taxpayer filed, but did not pay the correct amount.
- The taxpayer did not file a return.
- The state must mail the Notice of Tax Due to the taxpayer and demand payment.
- The taxpayer neglects or refuses to pay the full amount.
In order to avoid receiving a Notice of State Tax Lien, you should either pay the tax liability in full, or contact the Department of Revenue to discuss a payment plan. Even under a payment plan, the state can still file a lien against you.
How To Remove a State Tax Lien From Public Record
Tax liens can harm your credit rating. Under federal law, consumer reporting agencies maintain the right to retain and report your Notice of State Tax Lien for up to seven years after you paid your liability. For these reasons, you may want to take these steps to remove the lien from your credit reports.
- Request a copy of your credit report. Check the lien status. Credit bureaus automatically update this status without a request.
- Contact all involved agencies to dispute the lien if your status is not up to date.
- Those agencies will contact your county’s courthouse to confirm your information. Each dispute will be resolved. The agencies will contact you to confirm how each dispute turned out, and they will let you know if the lien was removed.
How To Remove a Tax Lien
Our experienced Kentucky bankruptcy attorneys have all the information you need to remove your tax lien. In this section, we’ll explain how to appeal your lien, have it withdrawn, have it released, and subordinate your lien.
Appeal Your Lien:
If we can prove that the IRS was in the wrong, you can lift your lien through the appeals process. Below are examples of when this is appropriate.
- You paid your tax debt in full.
- The lien was falsely filed against you.
- The IRS did not follow the proper procedures.
- The statute of limitations on debt collection expired.
- You did not get an opportunity to challenge the amount.
- You were filing for bankruptcy when the IRS filed a lien.
- The liability is your spouse’s, and you want to use this defense.
If any of these apply to you, file for an appeals hearing right away. You must file the request within 30 days of the lien filing. If you feel overwhelmed, our office is here to help. We will provide all the information you need to appeal your lien.
Have Your Lien Withdrawn:
This is a hopeful option for many of our clients. When you have a lien withdrawn, it’s as if the lien was never there. If you pay your lien off, or if we prove it to be falsely filed, this option may work for you.
In some cases, the IRS may agree to allow the taxpayer to pay less than the total tax debt, but still an adequate amount. As this is not full repayment, this is a “release” rather than a withdrawal.
Have Your Lien Released:
You may also file for a lien release, or have your lien released automatically. Automatic releases occur 30 days after you pay your debt in full, or if you arrange a payment plan. After a lien is released, it is not tied to your assets any longer. Public records reflect this change, but you should still send a copy of the release to credit reporting bureaus to reflect the change on your credit report.
Subordinate Your Lien:
The last option we’ll outline is lien subordination. In this situation, another creditor subordinates the IRS’s interest in a certain property, allowing them to move ahead of the line. For example, during a home refinancing, the home may have a lien placed on it. The IRS may allow a lender to overlook the lien to move ahead with refinancing. In this case, the IRS may want a portion of the profits.
This process is often convoluted, and not usually the most favorable. As this option often stands to benefit the IRS more than the taxpayer, we recommend speaking with our tax attorneys to fully explore your options.
How To Avoid a Tax Lien
The simplest, most effective way to avoid a lien is paying your taxes on time and in full. Always file your taxes before the IRS considers filing a lien against you. While these liens are removable, they might badly damage your credit score. We’ve compiled a list of ways to stay on top of your taxes and avoid a lien.
- Always respond in a timely manner to letters from the IRS.
- Keep track of your tax status. Organize your records in a secure location.
- If you believe your lien was falsely filed, contact the IRS sooner rather than later.
- If you cannot pay in full before the deadline, file an extension and pay as much as you can.
- If you cannot pay in full before the deadline, contact the IRS to set up an installment plan.
- Always make your installment payments on time and in full.
- Contact O’Bryan Law Offices to speak with our experienced tax attorneys. They will help you through the process and make sure you get the best possible outcome.