Legal Blog

The Weekly Scenario: Notice of Federal Tax Lien

Question: The IRS filed a Notice of Federal Tax Lien on delinquent income taxes I owed. I satisfied all the taxes that were due and now I am waiting to hear what the next steps are.

Answer: When an individual owes individual or business (federal) taxes, a lien from the IRS will likely arise in favor of the IRS in all property of the delinquent taxpayer.

Since you satisfied the amount due, the IRS should issue a Release of the Notice of Federal Tax Lien. The IRS will also discharge its tax lien on any specific property for which it had filed and should also agree to subordinate its tax lien on property to any other creditors.

The IRS is then required to certify a release of the federal tax lien within 30 days after full payment. The release will be recorded by the IRS. The IRS is supposed to notify credit reporting agencies about the withdrawal of the lien.

Comment: If the IRS does not take care of the above in a timely manner, a taxpayer can sue the IRS for damages. However, the standard is a ‘knowingly or through negligence’ fails to release the tax lien required to have been released.

 

 

 

As always, if you have any questions or would like to learn more, please contact me at sshane@offitkurman.com or 301-575-0313.

ABOUT STEVE SHANE

Steve Shane Casual SmallSteve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.

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