Lien Withdrawal

Tax liens now have a new policy allowing for withdrawal. This withdrawal removes the lien from your life as if it was never there and this happens as soon as the lien is paid in full or if it was proved that it was falsely placed. You may also qualify for withdrawal if you qualify for the Fresh Start Initiative, have started a direct debit agreement or if your balance owed was less than $25,000.

However, lien withdrawals are not available at the state level. Liens placed on you by the state will stay on your credit report and are not able to be withdrawn like the IRS lien.

In order to get a withdrawal of a lien, you must make a formal request to the IRS. To make this request you use Form 12227, also known as an Application for Withdrawal of Notice of a Federal Lien. Once your form has been filed, the IRS will send back form 10916(c), which is the start of clearing the lien off your credit.

It’s important to know that not only are state liens not eligible for this process, but neither are tax settlements. These tax settlements are often called “Offers in Compromise” and occur when the taxpayer and the IRS agree upon a lower payment and settle on terms of the lien. Because this means you never paid the exact amount in full, the IRS will not offer a withdrawal of the lien. However they will offer a release.

Lien Release

This process is pretty similar to lien withdrawal. 

If you qualify for the Fresh Start Initiative and if your balance owed is below $25,000 you can request the lien be released. If not, once your debt has been paid in full or you have agreed upon an instalment agreement, your lien will be released after 30 days. 

When a lien has been released, it means it is no longer attached to your property or assets. When a lien is released it is also removed from the public record. However, the lien will stay on your credit report for up to ten years after the debt has been paid back to the IRS. 

Once you receive notice of your lien release, you can update your credit report with the credit reporting bureaus.