How to Obtain a Release of IRS Lien on Your Property

If you have an IRS lien on your property, it can significantly impact your ability to sell or refinance. However, obtaining a release of that lien is possible. Here’s a step-by-step guide to help property owners navigate this process effectively.

Step 1: Understand the Lien

First, familiarize yourself with the IRS lien. An IRS lien is a legal claim against your property due to unpaid taxes. Understanding the nature of the lien will help you determine the best course of action.

Step 2: Resolve the Tax Debt

To obtain a release of the lien, you must pay off the underlying tax debt. You can do this by:

• Paying the Full Amount: Pay the total amount owed to the IRS, including any interest and penalties.
• Setting Up a Payment Plan: If you cannot pay the full amount immediately, consider establishing an installment agreement with the IRS.

Step 3: Gather Necessary Documentation

Once the debt is settled, gather the necessary documentation to prove your payment. This typically includes:

• Proof of Payment: Bank statements or IRS receipts that show the amount paid.
• Form 12277: Complete IRS Form 12277, “Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien.” This form requests the release of the lien.

Step 4: Submit the Release Request

Submit your request for lien release to the IRS by sending Form 12277 to the appropriate address. Ensure that you include copies of the proof of payment and any other required documentation.

Step 5: Follow Up with the IRS

After submitting your application, follow up to confirm that your request is being processed. You can do this by calling the IRS at 1-800-829-1040. It’s essential to keep a record of your interactions for future reference.

Step 6: Receive the Lien Release

If the IRS approves your request, they will issue a “Certificate of Release of Federal Tax Lien.” This document serves as proof that the lien has been lifted. Make sure to keep this certificate in a safe place, as you may need it when selling or refinancing your property.

Additional Tips

• Consult a Tax Professional: If you feel overwhelmed, consider seeking help from a tax professional or attorney specializing in IRS issues. They can provide personalized guidance and ensure you complete the process correctly.
• Check Your Credit Report: After receiving the release, check your credit report to ensure the lien has been removed. This is crucial for maintaining your creditworthiness.

Obtaining a release of an IRS lien can be a complex process, but with the right steps and documentation, you can successfully navigate it.

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