IRS Speeds Lien Relief for Homeowners Trying to Refinance, Sell

The Internal Revenue Service announced an expedited process that will make it easier for financially distressed homeowners to avoid having a federal tax lien block refinancing of mortgages or the sale of a home.


If taxpayers are looking to refinance or sell a home and there is a federal tax lien filed, there are options. Taxpayers or their representatives, such as their lenders, may request that the IRS make a tax lien secondary to the lien by the lending institution that is refinancing or restructuring a loan. Taxpayers or their representatives may request that the IRS discharge its claim if the home is being sold for less than the amount of the mortgage lien under certain circumstances.

The process to request a discharge or a subordination of a tax lien takes approximately 30 days after the submission of the completed application, but the IRS will work to speed those requests in wake of the economic downturn.

“We don’t want the IRS to be a barrier to people saving or selling their homes. We want to raise awareness of these lien options and to speed our decision-making process so people can refinance their mortgages or sell their homes,” said Doug Shulman, IRS commissioner.
“We realize these are difficult times for many Americans,” Shulman said. “We will ensure we have the resources in place to resolve these issues quickly and homeowners can complete their transactions.”

Filing a Notice of Federal Tax Lien is a formal process by which the government makes a legal claim to property as security or payment for a tax debt. It serves as a public notice to other creditors that the government has a claim on the property.

In some cases, a federal tax lien can be made secondary to another lien, such as a lending institution’s, if the IRS determines that taking a secondary position ultimately will help with collection of the tax debt. That process is called subordination. Taxpayers or their representatives may apply for a subordination of a federal tax lien if they are refinancing or restructuring their mortgage. Without lien subordination, taxpayers may be unable to borrow funds or reduce their payments. Lending institutions generally want their lien to have priority on the home being used as collateral.

Collection Due Process (CDP)

Collection Due Process (CDP)

CDP procedures are available to you if you've received any one of the following notices:

• Notice of Federal Tax Lien
• Notice of Intent to Levy

CDP Procedure
You have 30 days to request a hearing to preserve your right to go to Court.
Complete Form 12153, Request for a Collection Due Process or Equivalent Hearing.

It is important you identify all your reasons for your disagreements.
The completed Form 12153 should be sent to the same address that is shown on your Lien or Levy Notice.

If your request is not received within 30 days, you are still entitled to an Appeals hearing. However, if you still disagree with the Appeals determination you cannot go to Court.

Dealing with the IRS can be very difficult, why not start here and let the expers help you out.

Do You Have a Tax Lien?

Tax liens can be filed by the IRS 10 days after a balance due notice or demand for payment has been sent to the tax payer. Lien's are a public notice to the tax payer's creditors that the goverment has claim against the tax payer's property.

The IRS will only release a notice of federal tax lien within 30 days of the tax payer paying their liability in full or if an offer in compromise is accepted and the terms of the agreement fulfilled.

Liens are filled in the courthouse of the county of residence of the taxpayer. Most people believe that the IRS reports this to the credit bureaus. This is not the case. The federal tax lien is public notice and the credit bureaus pick it up there. Having a lien on your creidt reort will damage your credit score.

If you questions about tax liens or other tax problems contact Effectur