Tax Seminar #3 – December 3 2012
Workbook - Zicklin School of Business
Workbook - Zicklin School of Business
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Adjustments to IRS Lien Policies<br />
Page 1 of 2<br />
Adjustments to IRS Lien Policies<br />
Increase in the lien filing threshold<br />
The Fresh Start changes increase the IRS lien filing threshold from $5,000 to $10,000. Liens may still be filed on<br />
amounts less than $10,000 when circumstances warrant. The IRS will not retroactively apply the new $10,000 lien<br />
filing threshold and automatically withdraw a previously filed lien.<br />
Requesting a lien withdrawal after the lien has been released<br />
The IRS may now issue a withdrawal of a filed Notice of Federal <strong>Tax</strong> Lien after the lien has been released. If you wish<br />
to have the Notice of Federal <strong>Tax</strong> Lien withdrawn, you must request the withdrawal in writing. Please use Form 12277,<br />
Application for Withdrawal, (PDF). In item 8, Reason for requesting withdrawal, check box d, the best interest<br />
provision.<br />
Generally, eligibility requirements are:<br />
• Your tax liability has been satisfied and your lien has been released<br />
• You are in compliance for the past three years in filing:<br />
◦ All individual and business returns<br />
◦ All information returns<br />
• You are current on your estimated tax payments and federal tax deposits, as applicable.<br />
Lien withdrawal after entering into a Direct Debit installment agreement<br />
If you are a qualifying taxpayer and meet the eligibility requirements, you may have your lien withdrawn after entering<br />
into a Direct Debit installment agreement. Your request for lien withdrawal must be in writing. Please use Form 12277,<br />
Application for Withdrawal (PDF). In item 8, “Reason for requesting withdrawal,” check box b, the “entered into an<br />
installment agreement” provision.<br />
Qualifying taxpayers are:<br />
• Individuals (Form 1040 tax)<br />
• Businesses with income tax liability only<br />
• Out of business entities with any type of tax debt<br />
Eligibility Requirements are:<br />
• The current amount you owe must be $25,000 or less<br />
• If you owe more than $25,000, you may pay down the balance to $25,000 prior to requesting the lien<br />
withdrawal to be eligible<br />
• Your Direct Debit Installment Agreement must full pay the amount you owe within 60 months or before the<br />
Collection Statute expires, whichever is earlier<br />
• You must be in full compliance with other filing and payment requirements<br />
• You must have made three consecutive direct debit payments<br />
• You cannot have previously received a lien withdrawal for the same taxes unless the withdrawal was for an<br />
improper filing of the lien<br />
• You cannot have defaulted on your current, or any previous, direct debit installment agreement<br />
If you are currently on a regular installment agreement, you may convert to a Direct Debit Installment Agreement. To<br />
convert a regular installment agreement to a Direct Debit Installment Agreement:<br />
• Individuals may use the Online Payment Agreement (OPA) application, call the toll free line listed below, or visit<br />
your local IRS office<br />
• Businesses may call the toll free line listed below or visit your local IRS office<br />
If you have questions or need assistance with the direct debit process, please call the applicable telephone number<br />
below.<br />
158<br />
http://www.irs.gov/businesses/small/article/0,,id=239095,00.html<br />
12/2/2011