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IRS Regulation to Withdraw Tax Lien From Credit Report

Tax Resolution Software

Q: If a taxpayer has paid the balance in full and received a release from the lien, is there a way to get that removed from the credit report, that way it can look like a withdrawal?

A: One issue the IRS considers when deciding to withdraw a lien is. . . . if it is in their best interest. According to the government and the taxpayer advocate, if the balances have been paid in full it may be considered in the best interest of the IRS and taxpayer to withdraw a lien. The difference between a lien withdrawal and a lien removal can be described as the difference between a divorce and an annulment. One stays on your record, while the other is erased forever as if it never happened. Definitely request the withdrawal, you just might get it wiped from the slate!

Under the 2011 Fresh Start initiative the IRS set guidelines for when it would withdrawal a notice of federal tax lien.  One option is when your tax lien has been released and requires the taxpayer to have been in compliance for the last 3 years, as well as being current on their estimated tax payments.  In this situation you would need to request the withdrawal by filing a Form 12277, Application for a Lien Withdrawal.

The other option is for taxpayers who meet certain requirements and enter into a direct debit installment agreement.  See all requirements at After making 3 payments under the agreement a lien withdrawal can be requested.  To Help your client with this issue or other tax resolution cases, Join us at IRS Solutions.

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