Lien

[erchess]

While I am in the process of negotiating a payment agreement with the IRS we get notice that they are slapping a lien on the taxpayer. Negotiations had dragged out for a year from the time of the first IRS complaint by the time the lien letter was sent but I had been on the job only since November and I believe we are going to resolve the matter amicably in the next 30 days. The taxpayer owes about 90K which for him is a little over six month's income. He has very high expenses due to an exwife a girlfriend and three children and the fact he maintains four homes and five cars with much of the property belonging to Dad's estate. He wants to pay $500 a month until his late father's estate and a lawsuit concerning the circumstances of Dad's death are settled at which time he will pay off the remaining tax debt. Given this case can we stop the lien and will it materially affect his life for instance by hurting his credit? Will they take the lien off when the IA is approved or only when he pays up?

[erchess]

Bump

I am sending this back to the top to see if anyone has anything to offer. I guess what it comes down to is I am surprised they put on a lien while an IA is being negotiated.

[snowshine]

The problem here is that you are dealing with 2 different units of the IRS -- Examinations and Collections. The Collection Dept will send out a lien notice if the statuatory time limit has elapsed. This is usually a computer-generated process and automatic unless somebody in Examinations has put a hold on the timeline of the collections process. Ask your contact to put the matter back into "reconsideration" status, and hopefully that will make it go away. If an actual lien has already been filed, rather than just a notice, then you may need legal help.

Karl

[erchess]

snowshine

Ty but I am unclear. I could ask the fellow I have been working with or the person who sent the most recent letter for reconsideration status. Which do I ask?

[snowshine]

I'd try the one you are working with first, then escalate if necessary to a supervisor.

[New York Enrolled Agent]

While I am in the process of negotiating a payment agreement with the IRS we get notice that they are slapping a lien on the taxpayer. Negotiations had dragged out for a year from the time of the first IRS complaint by the time the lien letter was sent but I had been on the job only since November and I believe we are going to resolve the matter amicably in the next 30 days. The taxpayer owes about 90K which for him is a little over six month's income. He has very high expenses due to an exwife a girlfriend and three children and the fact he maintains four homes and five cars with much of the property belonging to Dad's estate. He wants to pay $500 a month until his late father's estate and a lawsuit concerning the circumstances of Dad's death are settled at which time he will pay off the remaining tax debt. Given this case can we stop the lien and will it materially affect his life for instance by hurting his credit? Will they take the lien off when the IA is approved or only when he pays up?

§6321 basically creates a lien in favor of the U.S. on all property or rights to property of a taxpayer when the taxpayer fails to pay his tax liability. This is called the "silent lien" because no one other than the taxpayer knows about it. But keep in mind, the lien exists. §6323 makes the lien public when a Notice of Federal Tax lien is filed with the county clerk. I presume that is the notice you say was received. The taxpayer does have 30 days to request a CDP hearing. Once the lien is in place there are two ways the lien will go away - the liability is paid in full or the lien becomes uneforceable due to the collection statute of limitations.

An installment agreement does not allow the IRS to levy on the taxpayer but there is no similar restriction on filing the notice of lien. If you are successful with the IA, the lien will remain in place. If he gets the inheritance and pays off the liability, then the lien will be released.

I'm not sure what reconsideration means. It appears from your post that this is strictly a collections matter and there is no doubt about the liabilty - just how to pay it. You might want to request the CDP hearing and present your IA to the Settlement Officer as a "collection alternative".

[taxmandan]

I can't imagine theIRS lifting the lien, they are going to protect the gov't interest until the debt is paid off. Sounds like there may be litigation involved with estates, inheritances, and other family issues so theIRS will want to be sure to have priority on money with a lien.