Federal Tax Lien

The Certificate Of Release For An IRS Tax Lien

The IRS can file a federal tax lien against a taxpayer for not paying taxes on time and thereby building up a tax debt. The tax lien limits the property rights of the taxpayer and at the same time lets the IRS regard it as security to ensure that unpaid taxes are met. A tax lien affects the taxpayer's credit rating and renders the person or the business a bad credit risk.

The federal tax lien can be released on certain conditions. The IRS can issue a release when the tax liability is paid in full and it is satisfied that all requirements are met. A release can also be obtained automatically if the period for enforcing the tax lien lapses. The tax payer has the choice of submitting a bond promising to pay the dues and giving a plan of how this will be achieved. If the IRS accepts this bond and reaches a settlement then too it can issue a release of the IRS tax lien.

When the IRS releases a tax lien it issues a Certificate of Release to the tax payer. This acts as proof that the property is no longer covered by a federal tax lien.

The IRS is bound by law to issue the release of the IRS tax lien within 30 days of the payment of the dues, acceptance of the bond or lapse of the tax lien itself, as the case may be. If the tax payer does not receive the Certificate of Release of Federal tax Lien within this period, the IRS can be requested for it formally.

There is a set procedure for requesting a Certificate of Release of IRS tax lien. The tax payer first has to get in touch with the local Lien Processing Unit in writing or on the phone and then collect the certificate from it. However, the certificate issued from this unit will not show the official recording information. If this is required then the taxpayer can contact the recording office where the Certificate of Release of federal tax lien was filed and secure a copy of the recorded certificate.

The tax payer may need a Certificate of Release for IRS tax lien for other purposes as well. A formal request then has to be made to the IRS. This request should contain details like the name and address of the tax payer, a copy of the Notice of Federal Tax Lien, the reason for requesting the release of the lien and so forth. In case the tax payer is requesting the tax lien be lifted because the tax has already been paid then a copy of the internal revenue receipt or any other proof of payment must be produced.