Lien Discharge

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Discharge of Property From Federal Tax Lien

A tax lien is a legal claim against the assets of the taxpayer who fails to pay taxes owed to the government. If you fail to pay back taxes after the IRS sends you a notice demanding your payment, they will proceed to the seizure of the property for your tax debt. The IRS may eventually file a notice of federal tax lien against your property. You most likely won't be able to sell or refinance your property, so the best option may be to request a tax lien discharge.

When you apply for a tax lien discharge, you will have to show the IRS that you are willing to pay your tax debt and protect their interests. If you apply for a lien discharge and the IRS grants your request, You will then receive a certificate of discharge that removes the tax lien from your property, and you can now sell or refinance your property. Without the lien discharge grant by the IRS, anyone who buys your property takes it subject to the IRS tax lien. However, the IRS can still seize your property. The tax lien will discharge any potential buyers because they won't want to be responsible for your tax debts and problems.

Reasons the IRS Will Grant For A Lien Discharge

An IRS tax lien doesn't take money out of your wages or bank account, but it can still cause you financial problems. It may prevent you from selling your property and can also hurt your credit. The tax lien applies to all of your property and takes effect as soon as you fail to pay your taxes after the IRS sent you a notice demanding payment. You may apply for a discharge of an IRS tax lien so you can sell or finance your property.

What Is A Lien Discharge?

The discharge of the IRS tax lien removes the charge or claim from a specific piece of property. If you apply for a lien discharge and the IRS accepted your request, you can sell or refinance the property documented in your certificate of discharge.

Reasons the IRS Will Grant Your Request For Tax Lien Discharge

  • You pay the IRS the same amount they could obtain from their lien interest in the discharged property.
  • Your other property that is subject to tax lien is worth twice as much as your tax liability.
  • The IRS may discharge a lien if the property is worthless or of no value.
  • You can sell the property and use the sales proceeds to pay off your debt.
  • If a third party owns property subject to your IRS tax lien, you can get a discharge by paying a deposit to the IRS.

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