This article covers how to withdraw an IRS lien. If you have active liens and debts that are still owed, you may want to see our Offer in Compromise Guide or call us for a free consultation with one of our tax attorneys at (888) 515-4TAX (4829).
Can I Withdraw An IRS Lien?
If you have paid your tax in full, or owe less than $25,000, and are in an IRS Fresh Start payment plan being paid by direct debit, you can submit an IRS Form 12227 to have the lien withdrawn from your credit report.
This is different than having shown as “released” because the withdrawn status means it is pulled completely from the record as if it never existed and you never owed the debt. Released tax liens will show as a debt that was then satisfied.
Here we will go over IRS Form 12277 in detail so you can fill it out yourself and send it in.
First we’ll go over filling out the form by section. We recommend filling it out in all CAPS so it is easier for the IRS to read.
- Taxpayer Name: Type in your full name the same as you put on your tax return.
- Social Security/Employer Identification No.: Put in your SSN or if applying for a business, it’s EIN.
- Taxpayer’s Representative: This should only be filled out by someone else you are paying to do it. If self-filling, leave this blank.
- Address: Your street address and unit number/letter if applicable
- City: List your city
- State: List your state or its postal abbreviation.
- Zip Code: Your zip code.
- Phone Number: This is optional but you can input your phone number.
- Attach a copy of Form 668(Y): If you can’t locate it do not worry about it, just fill in what info you do have if any. If you put nothing the IRS will look it up by SSN.
- Current status of the federal tax lien: Check Unknown if you are not sure. Most will show released if you paid it off or owe less than $25,000 and are in a Fresh Start Payment plan.
- Reason for requesting withdrawal: Select the option most applicable to you. If you paid it off or owe less than $25,000 and are in a Fresh Start Payment plan, check the last box that states it’s in the best interest of the taxpayer and the government.
- Explain the basis for the withdrawal request: State one of the following, whichever applies to your situation:
- Paid in full. “I HAVE PAID BACK ALL TAXES DUE AND QUALIFY FOR A LIEN WITHDRAWAL BASED ON THE IRS FRESH START GUIDELINES. IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT AND MYSELF THAT THE LIEN BE WITHDRAWN AS IT WOULD IMPROVE MY CREDIT SCORE AND ALLOW ME TO EARN MORE INCOME.”
- Less than $25,000 balance and on Direct Debit installment agreement: “I AM CURRENTLY ON A DIRECT DEBIT INSTALLMENT AGREEMENT FOR ALL BACK TAXES DUE AND QUALIFY FOR A LIEN WITHDRAWAL BASED ON THE IRS FRESH START GUIDELINES. IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT AND MYSELF THAT THE LIEN BE WITHDRAWN AS IT WOULD IMPROVE MY CREDIT SCORE AND ALLOW ME TO EARN MORE INCOME.”
Then sign and date at the bottom of the form.
The second step is finding the right IRS Lien Office to send the request to. The easiest way to do that is to call the IRS Lien Desk at (800) 913-6050. Tell the agent on the line you are trying to find the office to send your lien withdrawal request to. Ask for the address, phone number, and fax number of the office. You can then fax it or certify mail it to them. I prefer certified mail since you know for sure it got there. With fax, if it shows up as sent on your end it does not always mean it worked fine on their end.
In about two months the liens should show as withdrawn on your credit report.