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IRS Lien Release With Offer in Compromise Acceptance

A Notice of Federal Tax Lien can provide a number of problems for a taxpayer.  Recently, the IRS has been releasing the Notice of Federal Tax Lien when a taxpayer successfully has an offer in compromise accepted by the IRS and pays the offer amount.  This is a wonderful benefit to the taxpayer as the IRS did not always release the tax lien upon payment of the settlement amount, but rather would wait for the five-year compliance period after the offer has been accepted.

The video below has been prepared by a tax attorney at The McGuire Law Firm to provide additional information regarding this issue.  If you have any type of tax issues with the Internal Revenue Service, contact The McGuire Law Firm to speak with a tax attorney.

Can The IRS Refile a Tax Lien?

Can the Internal Revenue Service refile a Notice of Federal Tax Lien?  This is a very important question if in fact the IRS has filed a tax lien on you or your business.  The answer, of which, greater detail is provided below, is yes, the IRS can refile a tax lien.  The article below has been prepared by John McGuire, a tax attorney in Denver, Colorado at The McGuire Law Firm.  Please remember to always discuss your tax issues and related questions with your tax attorney or tax advisor.

Some background and overview will assist in answering the question above and general procedures followed by the Internal Revenue Service.  A statutory lien arises when a taxpayer does not pay a tax debt after demand has been made.  If no notice of federal tax lien is filed, the duration of a statutory lien will depend only upon the collection statute.  When the Notice of Federal Tax Lien is file, the statutory lien is impacted by such lien notice.  A statutory lien is always extinguished when the collection statute expires, but a statutory lien can also be released through self-releasing lien language on the Notice of Federal Tax Lien.  The self-releasing lien language may apply even if the collection statute was extended, or perhaps suspended.

The main policy behind a self-releasing lien is to ensure the government’s compliance with certain laws.  Under Internal Revenue Code Section 6325, the IRS must issue a lien released within thirty days of the liability becoming legally unenforceable or the liability being paid.  The trigger for a self-releasing lien will coincide with the initial collection statute expiration date, which helps to ensure that the IRS property releases the tax lien within the period of time mandated by law.

When it is determined there is a need to continue the statutory lien and the Notice of Federal Tax Lien, Form 668Y is used to notify creditors (and the public) that the statutory lien and Notice of Federal Tax Lien remain in full force.  It is very important to note that the refiling of a tax lien can only occur while the tax liability can be collected upon, meaning the collection statute has not expired or the collection statute has been extended or suspended.  The IRS does not have to refile the lien though, even if the collection statute is open. Generally, the IRS will only refile the liens when there is a need to preserve the attachment of the statutory lien to certain assets and maintain priority lien position amongst other creditors.  When the lien notice is refiled Internal Revenue Code Section 6323(g) the IRS’ lien position is preserved.

All this being said, what is the refiling period?  The time the IRS has to refile a notice of Federal Tax Lien has a beginning and end date.  The refiling period is a 12 month period.  This one year period the IRS has to refile the tax lien is the one year period ending 30 days after the ten-year period following the assessment of the tax for which the lien was filed.  For example, if the tax was assessed on April 15, 2010, the refiling period would be April 16, 2019 through April 15, 2020. In short, the IRS has until 30 days after the collection statute expiration date to refile the lien.

The above article was prepared by John McGuire of The McGuire Law Firm.  As a tax attorney and business attorney, Johns practice focuses primarily on tax issues before the IRS, tax related opinions & advice and business transactions.

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Is a Tax Lien Public Knowledge?

Are tax liens a matter of public record?  If so, why?  The answer is, yes, a tax lien, such as a notice of federal tax lien filed by the Internal Revenue Service is made public.  The reasoning is the same as to why certain debts are made a matter of public record as it provides notice to other creditors that a lien exists, as well as notice to the buyer.  A creditor or buyer must be able to access such information to determine whether to lend money to a debtor or take the proper steps to ensure clean title to an asset is received.  The video below has been prepared by John McGuire, a tax attorney at The McGuire Law Firm.  The McGuire Law Firm has law offices in Golden, Colorado and Denver, Colorado.  Please contact the firm to speak with a tax attorney.

IRS Tax Lien and Jointly Held Property

The filing of a federal tax lien by the Internal Revenue Service creates many issues and questions when property is held jointly.  Related issues can arise when the Internal Revenue Service files a tax lien against a party, and the party holds an interest in property but the other owners of the property have no such tax lien. The issues can be further compounded by state law matters such as community property and joint tenancy, tenancy in common and tenancy by the entirety.  Joint tenancy will be discussed below.

A joint tenancy is created when two or more people become the owners of property and the ownership is equal and undivided, and when the interest of each tenant is created through the same conveyance at the same time and the interests are equal.  You may have seen a right of survivorship stated within a joint tenancy or the JTWROS, which means joint tenancy with right of survivorship.  Generally, a joint tenancy will have a right of survivorship and under this right of survivorship, when one tenant passes away, the surviving joint tenant or joint tenants will automatically own a greater portion of the property.  For example, if A & B own Blackacre Properties as joint tenants with right of survivorship.  If A passes away, B is now the sole owner of Blackacre Properties.  It is important to note that certain states have removed the survivorship issues from joint tenancy, and thus check the applicable laws within the applicable state. 

So how does an IRS tax lien impact property held in joint tenancy?  Typically, if only one of the joint tenants owes taxes and thus the tax lien has been filed against only one of the joint tenants, the lien attaches to the taxpayer’s interest and thus the entire property, which can be sold pursuant to collection action such as a judicial sale under Section 7403 of the Internal Revenue Code.  However, the non-liable joint tenants, those tenants who have not had the tax lien filed against them, are required to receive compensation from the sale of the property. What if the joint tenant were to pass away?  Under most states, if the person whom the tax lien has been filed passes away before the other joint tenants, the tax lien will cease to attach to the property held in joint tenancy.  What if such individual is the last to die?  If the individual with the tax lien survives all other joint tenants, the tax lien would attach to the entire property.  Of course, there are exceptions to this rule and you must check the applicable state law.

If you have questions related to the impact of a federal tax lien on your individual or business property, you can speak with a tax attorney and business attorney by contacting The McGuire Law Firm.  The McGuire Law Firm provides a free consultation with an attorney to discuss your tax and business matters. 

IRS Tax Lien and Jointly Held Property

 

Form 668Y IRS Tax Lien

Form 668Y is the form used by the IRS when the IRS files a tax lien.  The form will state the taxpayer, type of tax owed, the amount of tax and period of tax.  Generally, the IRS will file Form 668Y in the county where the taxpayer lives or conducts business and the county or counties where the taxpayer owns real property.  The IRS lien gives notice to creditors that the lien exists and becomes public knowledge.  Further, the tax lien will likely impact the taxpayer’s credit.

The video below has been prepared by a tax attorney at The McGuire Law Firm to provide additional information regarding a tax lien.  The McGuire Law Firm has offices in Denver, Colorado and Golden, Colorado.  You can contact the firm to schedule a free consultation with a tax attorney.

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Can a Tax Lien Be Released

Can a IRS tax lien be released?   This is a common question asked of a tax attorney when an individual or business owes taxes to the IRS and the IRS has filed a tax lien.  The answer is, yes, a tax lien can be released under certain situations and circumstances.  The video below has been prepared by a Denver tax attorney at The McGuire Law Firm to provide information regarding the release of a federal tax lien.

If you are experiencing tax problems or tax debts with the IRS, you can discuss these matters with a tax attorney by contacting The McGuire Law.  The McGuire Law Firm has offices in Denver, Colorado and Golden, Colorado for your convenience.

 

Call The McGuire Law Firm and schedule your free consultation with a Denver tax attorney!

The Impact of State Law on a Federal Tax Lien

How does state law impact what a federal tax lien attaches to?  Because state law can vary greatly from state to state, this is an important issue when considering the impact of a federal tax lien issued by the Internal Revenue Service.  The article below has been drafted by a tax attorney in Denver, Colorado at The McGuire Law Firm to provide information related to the above issue.  Please remember to always consult with your tax attorney or tax professional regarding your specific issues.

When considering property rights and what rights a federal tax lien attaches to, it is very important to consider state law.  While federal law will determine whether an interest qualifies as property or a right to property, the Internal Revenue Service will look to at the applicable state law in determining what rights a taxpayer has in regards to a specific piece of property.  In the court case, United States v. Craft, 535 U.S. 274 (2002) (and see Drye v. United States) the court specifically stated, “One looks to state law determine what rights the taxpayer has in property the Government seeks to reach, then to federal law to determine whether the taxpayer’s state delineated rights qualify as property or rights to property within the compass of federal tax lien legislation.

Thus, state law will determine the taxpayer’s right in property, but it is important to remember that state law will not determine whether something is property under the Internal Revenue Code.  A good example of this issue is a state issued liquor license.  Under many states laws, a liquor license may not be recognized as property.  Whereas, under the Internal Revenue Code, the question is whether the taxpayer has rights under the state’s applicable laws.  Because the taxpayer does have rights under state law, the liquor license would be considered property under the Internal Revenue Code, and there when the Notice of Federal Tax Lien is filed by the IRS, the tax lien will likely attach to the liquor license.

If you owe taxes to the IRS, or the IRS has filed a tax lien against you or your business, contact The McGuire Law Firm to speak with a tax attorney in Denver, Colorado.  The McGuire Law Firm allows a free consultation with a attorney to discuss your IRS issues and matters, or other tax questions, issued and concerns.

Contact The McGuire Law Firm today to schedule your free consultation!

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What Property Does an IRS Tax Lien Attach To?

What property does an IRS tax lien attach to?  As a tax attorney, I am asked many questions regarding tax liens, and one such question is, what property does the tax lien attach to?  The article below has been prepared to provide additional information regarding the above question.  As always, you should discuss your particular tax matter with a tax attorney.  If you would like to speak with a tax attorney in Denver, Colorado, please feel free to contact The McGuire Law Firm to schedule a free consultation.

 

In many respects, the answer to the above question is easy because a tax lien issued by the Internal Revenue Service attaches to all property and rights to the property of the taxpayer.  Thus, this is a very broad and far reaching lien because it not only includes tangible property, but a tax lien also attaches to intangible property and rights to intangible property.  One exception exists as a tax lien does not attach an interest of an Indian in restricted land that is held by the United States.  Please see treasury regulation 301.6321-1 for information regarding this exception.

 

One important question or issue to consider is, how have courts interpreted the broad reach of a federal tax lien?  In general, courts have interpreted the broad language relating to tax liens to include many different types of property that vary greatly when compared against one another, and this includes contingent interests, future interests and contracts, which are all discussed below.

 

–          Future Interests: A future interest in property does not prevent a federal tax lien from attaching to such property.  Thus, if a taxpayer’s enjoyment to property is in the future, the tax lien can still attach to the property.  For example, if a taxpayer has a right under a contract or trust to receive payments or distributions of property, the tax lien will attach to the taxpayer’s entire right regardless of when the payments or distributions will be made.  See Rev. Rule 55-210 for more information regarding this issues.

–          Contingent Interests: A contingent interest would be an interest that a party will receive only if certain conditions occur.  For example, an individual may be a contingent beneficiary of a trust if the receipt of property requires them to perform certain tasks, live longer than another individual etc.  Courts have found that an IRS tax lien can attach to a contingent interest.

–          Executory Contracts: Courts have held that a tax lien can attach before performance within a contract agreement.  In Seaboard Surety Co. v. United States, 306 F.2d 855, 859 (9th Cir. 1962) the tax lien attached to taxpayer’s contract rights that taxpayer had assigned.  When the contract was performed, the government had a lien on the contract proceeds.  Other courts have held that contract rights under a partially executed contract had a realizable value and therefore, were a right to property that a tax lien could attach to.

In addition to the above issues, it is important to note that a tax lien attaches to property acquired by the taxpayer during the existence (or after the filing) of the tax lien.  Thus, a federal tax lien issued by the Internal Revenue Service attaches to after acquired property, meaning property the taxpayer acquires after the tax lien has actually been filed.  This is likely different from other liens such as a mortgage.

If the IRS has filed a tax lien against you or your business, it is recommend you speak with a tax attorney or other tax professional.  You can schedule a free consultation with a Denver tax attorney by contacting The McGuire Law Firm.

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Your Rights as a Taxpayer Regarding an IRS Tax Lien

If the Internal Revenue Service has filed a tax lien against me, what are my rights as a taxpayer?  Because a tax lien filed by the IRS can have many negative implications, it is very important that you understand your rights as a taxpayer when the IRS files a Notice of Federal Tax Lien.  The article below has been prepared by a tax attorney at The McGuire Law Firm to provide information regarding your rights when the IRS files a tax lien.

Section 6320 of the Internal Revenue Code allows a taxpayer to challenge a Notice of Federal Tax Lien, request a Collection Due Process Hearing with the IRS Appeals Office, and seek a judicial review of the IRS Appeals determination.

The Notice of Federal Tax Lien issued by the Internal Revenue Service must be provided to the taxpayer in person, provided at the taxpayer’s home or principal place of business or forwarded via certified or registered mail to the last known address within five business days after the Notice of Federal Tax Lien has been filed for a tax period.  The lien notice will inform the taxpayer of the amount of the tax due and lien amount.  In terms of taxpayer right, the lien notice must inform the taxpayer of the taxpayer’s right to a hearing, the appeals procedure and the applicable procedures for the tax lien being released by the Internal Revenue Service.

If the taxpayer makes a Request for a Collection Due Process Hearing, the taxpayer will be contacted by the IRS Appeals Office, and a hearing date will be established.  An appeals officer who has no prior involvement with the taxpayer’s case, and who should act as an impartial party in analyzing the actions taken by the Internal Revenue Service, should be assigned to the case.

The Request for a Collection Due Process Hearing is made by preparing and filing Form 12153.  After filing the request, you should receive acknowledgement by the IRS that the request has been received and thereafter, you should receive a notice from the IRS calling for a hearing date.  At such time, you will be able to provide information and documents to the IRS appeals officer regarding your case and position.

If the IRS has filed a tax lien against your or your business, you have a serious tax problem with the IRS that needs to be addressed and resolved.  As a tax attorney, John McGuire has assisted many individual and business clients to resolve their tax matters, which in turn releases the federal tax lien that was filed by the IRS.  Furthermore, as a tax attorney, John McGuire knows your rights as a taxpayer and can assist you in resolving your IRS tax problems, IRS tax audits, IRS tax debts and other issues.  You can schedule a free consultation with a tax attorney in Denver, Colorado by contacting The McGuire Law.  A tax attorney can help you resolve your tax issues, and or assist with other tax matters.

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Denver Tax Attorney Discusses Refiling of an IRS Tax Lien

Can an IRS tax lien be re-filed?  Can the IRS re-file the Notice of Federal Tax Lien?  How does the IRS renew a tax lien?  As a tax attorney I have been asked the above questions and therefore have prepared the article below to provide general information regarding such issue.  Please remember, that the article below is for informational purposes only.  Please contact your tax attorney or tax professional directly to discuss the current tax laws and your specific issues and circumstances.

To retain priority as of the initial date the tax lien was filed, a Notice of Federal Tax Lien filed by the Internal Revenue Service must be re-filed within the required re-filing period.  If a re-filing of the IRS tax lien does not occur, most notices of federal tax lien will self release 30 days after the date that is ten years from the assessment date. This self release of the IRS tax lien can occur regardless of an extension of the IRS collection statute or suspension or tolling of the IRS collection statute.  Under Internal Revenue Code Section 6323(g)(3)(A) the IRS’ notice of federal tax lien can be re-filed during the one year period that ends 30 days after the expiration of the ten years from the date of assessment date.

For example, assume Jeff was assessed a tax liability on April 1, 1995 and the Internal Revenue Service filed a tax lien on August 1, 1995.  The self releasing date of the IRS tax lien would be May 1, 2005.  Even if Jeff tolled the collection statute by filing bankruptcy or by submitting an offer in compromise, the period for re-filing the IRS tax lien would begin May 1, 2004 and continue until May 1, 2005.

Where will the IRS re-file the tax lien?  Again, this is a common question and will be discussed briefly below.  Typically, the IRS will file a tax lien in multiple locations, and thus the question a to where they will re-file or must re-file the tax lien is a legitimate question.  Because the IRS files tax liens in multiple offices, when re-filing the tax lien, the IRS must re-file in each of the initial offices whereby the initial liens were filed.  See Internal Revenue Code Section 6326(g)(3)(A).  When the IRS files the initial notices of federal tax liens (self releasing tax liens) in multiple offices regarding a particular tax assessment, if the IRS fails to timely file the re-filing notices in each of the offices, the assessment lien will release and the re-filing of the other tax liens is considered ineffective.  See Treasury Regulations Section 301.6323(g)-1(a)(1).  Thus, if the IRS fails to properly re-file the tax lien in one office, the underlying assessment lien is invalid and the re-filed tax liens would be ineffective.

You can discuss your tax lien questions and issues with a tax attorney at The McGuire Law Firm.  The McGuire Law Firm has offices in Denver, Colorado and Golden, Colorado.

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