Fed Tax Liens - Requesting Release

Fed Tax Lien - Requesting Release

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Question or Topic

How do I request the IRS to Release a Federal Tax Lien

Taxes are paid in full, there has been an abatement or an OIC

If the IRS has not released the lien within thirty days, you can ask for a Certificate of Release of Lien. Send your written request with any required documents to:

District Director of Internal Revenue Service (Address to District in which the lien is filed)

Attention: Chief, Special Procedures

Your request should contain the following information:

A. The date of your request;

B. The name and address of the taxpayer;

C. One copy of each notice of Federal Tax Lien you want released; and

D. Why you want the IRS to release the lien.

If you have paid the tax, enclose a copy of either of the following:

1. An Internal Revenue Service receipt;

2. A canceled check;

3. Any other acceptable proof.

Please include a telephone number with the best time for IRS to call you should it need information.

The IRS may need to research your account to confirm you no longer have a liability. It will provide a release once the IRS completes the verification.

For an immediate or urgent Certificate of Release of Federal Tax Lien, visit or telephone the district office that filed the Notice of Federal Tax Lien.

Be prepared to show proof of payment.

You can pay any unpaid tax with a certified check, cashier’s check, or money order to receive a release.

The Tax is Not Paid In Full

There are procedures to request a "Certificate of Discharge" when the tax liability has not been paid, abated or compromised.

If the government's interest in the property is valueless, the district director has the discretion to issue a certificate of discharge without payment. For example, property subject to superior liens and having a forced sale value insufficient to cover those obligations might be discharged on this basis. Reg. Section 301.6325- 1(b)(2)(ii). The district director also has the power to discharge property, part of which is to be sold, and substitute the proceeds of the sale as the subject of the lien. Reg. Section 301.6325-1(b)(2)(ii).

Under appropriate circumstances a federal tax lien may be subordinated to the interest of a competing lienor. For example, the lien may be subordinated to a new loan if the new loan proceeds are paid to the government, or in other circumstances if the district director believes that subordination of the tax liability will ultimately increase the amount realizable from the property in question. Subordination is likely to be approved for situations where additional credit is needed to cover products or expenses.

Certificate of Discharge may be appropriate if:

the fair market value of the property not discharged is at least double the amount of the tax liability plus all prior liens to which the property is subject.

a part payment is made on the tax liability the interest of the government in the part to be discharged is valueless

the proceeds from a sale of part of the property are substituted for the property to be discharged, and the amount of the proceeds is equal to the lien amount

Withdrawal of the Federal Tax Lien

The IRS may withdraw a notice of federal tax lien upon a determination that the lien was premature or otherwise not in accord with administrative procedures; that the withdrawal of the lien will facilitate collection of the liability for which the lien was imposed; that withdrawal would be in the best interests of the taxpayer and of the United States; or if the taxpayer has entered an installment agreement to satisfy the liability for which the lien was imposed (and the installment agreement does not specify that the lien will not be withdrawn). Code Section 6323(j)(1).

If the lien is withdrawn, the taxpayer may request that the IRS notify credit agencies, financial institutions, and creditors of the withdrawal. Code Section 6323(j)(2).

Solutions are dependent upon facts & circumstances, law and the objectives. These elements vary from one time to another, from one circumstance to another and from from person or entity to another

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