What Is A Federal Tax Lien Release?The IRS issues a Federal Tax Lien Release in order to remove a tax lien on a tax payer's property. The Release of the Notice of Federal Tax Lien has to be issued within 30 days after the back taxes and other accruements have been paid off or adjusted. In cases where a bond has been given detailing a plan to pay off the debt the release is issued within 30 days too. At the time of obtaining a release, the tax payer is also expected to pay all the fees that have been charged in order to file and the release the lien. A Federal Tax Lien Release comes into force automatically within a certain period of the tax being assessed. If the tax was assessed after November 5, 1990 the tax lien becomes invalid within 10 years. This holds even when the assessment was carried out before 5th November 1990 but the date of expiry falls after this date. In cases where the tax has been assessed before 5th November 1990, the tax lien will expire after 6 years of the assessment. However, if the IRS has filed the tax lien again in the interim period, the Release is not automatically applicable. The lien can be refiled within a period of one year which ends 10 years and 30 days from the date of assessment. The IRS refile the lien after this period too without affecting its validity. However the legal effects of the earlier filing will not hold any longer. The law requires the IRS to issue the release of the tax lien when the dues have been fully paid or when the period of enforcing the lien has expired. The tax payer has the option of suing the federal government for damages if the IRS knowingly or by mistake has not issued a Federal Tax Lien Release when it should have. The IRS has a set of definite rules and procedures which it follows in order to issue a Federal Tax lien release. These are standardised rules which make the procedure faster. When the release is issued the tax payer is given a Certificate of Release of Federal Tax Lien, which acts as proof that the property in question is no longer attached to the IRS. The Centralized Lien Processing Unit runs a toll free helpline to address any problems related to obtaining a Federal Tax Lien Release. Having a tax lien removed is to the advantage of both individuals and businesses. Once a lien is lifted they can improve their credit ratings and invest in real estate without worrying about it getting attached to an existing tax lien. |