Tax Lien - Payment in Full & Mechanics of Getting it Released
A tax lien is a lien imposed by law upon a property to secure the payment of taxes.
Generally, a tax lien is imposed by the IRS because the taxpayer whose property is being subjected to the lien, owes the IRS back taxes.
Often taxpayers wonder when exactly a lien is removed upon payment in full of the taxes.
Is it at the time of payment or some other time? This article explains the details of when a lien imposed by the IRS is released.
Note that there are other methods for releasing a lien.
This article specifically describes the release of a lien through a payment in full of the taxes owed.
A lien imposed by the IRS continues until the liability for the amount so assessed is satisfied or becomes unenforceable by reason of lapse of time.
Satisfaction of the tax liability occurs when the IRS determines that the entire tax liability listed in the Notice of Federal Tax Lien (the "NFTL") has been satisfied or when the taxpayer provides the IRS with proof of full payment for the entire liability (including interest and penalties) listed in the NFTL.
The IRS must issue a certificate of release of lien if the liability for the amount assessed, plus any accrued interest, has been fully satisfied.
When this condition has been met, a certificate of release of lien must be issued within 30 days after the date that the tax liability has been fully satisfied.
The taxpayer must submit a request for release of the tax lien with the Area Director for the area in which the NFTL is filed.
The request must be made in writing, must include the taxpayer's name and current address, must include a copy of the filed lien, must provide the basis under which the request for release is made and must include proof of payment.
Proof of payment is made by producing an IRS cashier's receipt or a canceled check reflecting full payment of the tax liability or by any other method acceptable to the Area Director.
The certificate of release of the lien must be filed (usually by the IRS) in the same office as the notice of lien.
A filed certificate of release constitutes conclusive evidence that the tax lien is extinguished.
Notably, payment of the liability does not release the lien until the certificate of release has been filed.
Generally, a tax lien is imposed by the IRS because the taxpayer whose property is being subjected to the lien, owes the IRS back taxes.
Often taxpayers wonder when exactly a lien is removed upon payment in full of the taxes.
Is it at the time of payment or some other time? This article explains the details of when a lien imposed by the IRS is released.
Note that there are other methods for releasing a lien.
This article specifically describes the release of a lien through a payment in full of the taxes owed.
A lien imposed by the IRS continues until the liability for the amount so assessed is satisfied or becomes unenforceable by reason of lapse of time.
Satisfaction of the tax liability occurs when the IRS determines that the entire tax liability listed in the Notice of Federal Tax Lien (the "NFTL") has been satisfied or when the taxpayer provides the IRS with proof of full payment for the entire liability (including interest and penalties) listed in the NFTL.
The IRS must issue a certificate of release of lien if the liability for the amount assessed, plus any accrued interest, has been fully satisfied.
When this condition has been met, a certificate of release of lien must be issued within 30 days after the date that the tax liability has been fully satisfied.
The taxpayer must submit a request for release of the tax lien with the Area Director for the area in which the NFTL is filed.
The request must be made in writing, must include the taxpayer's name and current address, must include a copy of the filed lien, must provide the basis under which the request for release is made and must include proof of payment.
Proof of payment is made by producing an IRS cashier's receipt or a canceled check reflecting full payment of the tax liability or by any other method acceptable to the Area Director.
The certificate of release of the lien must be filed (usually by the IRS) in the same office as the notice of lien.
A filed certificate of release constitutes conclusive evidence that the tax lien is extinguished.
Notably, payment of the liability does not release the lien until the certificate of release has been filed.
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