Discharge of Federal Credit Lien

[billbrennan]

Hi, my name is Bill.

I have a client that has a federal tax lien and I am trying to have it discharged. They timely filed their 2013 taxes on extension before the October 15^th deadline. Looking at the application for the discharge of the lien, there is no choice in the basis of discharge for the statute of limitations. Section 6325 of the IRC has a list describing reasons for the release of a lien, the list includes “the IRS may release a lien if the liability is legally unenforceable.” Which option on the lien discharge application would be the correct choice in this circumstance?

I am going to file form 14135 with a copy of the Zillow property evaluation and a list of necessary repairs, which gives a net estimate value of the property at $44,152.

So the question is, is form 14135 the way to go? The property is in serious disrepair and my client is below the poverty level and therefore, has no funds to repair his home. If we get the IRS lien discharged, he can refinance and get funds to repair his house.

Any suggestions?

[New York Enrolled Agent]

I have a client that has a federal tax lien and I am trying to have it discharged. They timely filed their 2013 taxes on extension before the October 15^th deadline. Looking at the application for the discharge of the lien, there is no choice in the basis of discharge for the statute of limitations. Section 6325 of the IRC has a list describing reasons for the release of a lien, the list includes “the IRS may release a lien if the liability is legally unenforceable.” Which option on the lien discharge application would be the correct choice in this circumstance?

There is a difference between a release of lien and a discharge. The form 14135 will not contain any choice for the release.

You need to get an IRS transcript and see when the 2013 assessment of tax was made. The collection statute runs 10 years from that date. The lien self-releases after that period UNLESS the taxpayer took any action that extended the 10-year CSED. There would be no need to request a discharge if the statute has run. First priority - find the assessment date and go from there.

[billbrennan]

In response, the lien has not self released. How do I request the IRS to release the lien?

We have the transcript that the taxes have been timely filed in 2013 and it's been over 10 years and the lien hasn't been released.

[New York Enrolled Agent]

Review IRS Pub 1450