Lien Release or Discharge

(630) 960-0500

An IRS lien is like a mortgage on your home, except that it attaches to everything you own. Under certain circumstances, IRS' liens may be released or discharged. A lien may be released, for example, if the sale of the property or the proceeds of the loan will be sufficient to pay off the entire amount of the lien, plus any accrued interest and penalties computed till the date of closing. Alternatively, it can be released if it has been wrongfully filed against an innocent third party, or has become unenforceable by virtue of the  expiration of the statute of limitations. A lien may be discharged if the proceeds from the sale of property or the loan are not sufficient to pay off the full amount of the balance due. That procedure usually involves the sale of an asset of the taxpayer that is encumbered by another creditor's lien or mortgage senior to the IRS' lien and has little or no equity beyond what is owed the senior lienholder(s). In those situations, the IRS may be petitioned to discharge its lien as to that property in order to facilitate its sale by the taxpayer to a third party. For a more detailed discussion on this procedure, please see:  Sale of Property Encumbered by a Federal Tax Lien.

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