Federal Tax Liens are a massive pain in the butt for you and your business. Liens can tie up ALL of your assets, making it impossible for you to pay your employees or do anything with your property. At the Key Tax Group, we specialize in full-service tax resolution designed to provide you with relief from the IRS. As tax attorneys, we are committed to providing you with the best tax advice and services possible. Here are our tips for filling out IRS Form 12277 to withdraw a lien from your business. Got more questions? Reach out to us today to find out how we can help!
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What is a Federal Tax Lien?
A federal tax lien is a tool utilized by the IRS to secure their tax revenue from your business. It often accompanies the onset of unpaid tax debt and is a way for the government to protect its financial standing. Liens are frustrating as they are public record, meaning that anyone and everyone can know there is a lien on your business. They also attach to all of your assets and sometimes go out to credit providers, meaning they lower your credit score in addition to making it difficult to utilize your resources. In many cases, you may not know you have a lien until your assets are frozen. If you have discovered that there is a lien on your business, reach out to us today for relief from the IRS!
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The Withdrawal of Your Lien
While you can choose to pay the taxes in full to get this government tool off your back, getting a lien withdrawn from your business eliminates any record of a lien on your business. In order to do so, IRS Form 12277 needs to be filled out and sent to the IRS. While getting a lien withdrawn removes the record of the lien from the public domain, it does not eliminate the debt. You are still liable for the outstanding balance owed to the government, but are able to pay it without the hassle of lowered credit scores and difficult asset usage. Here are a few of our tips for filling out Form 12277.
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Utilize Your Resources
When filling out Form 1277, it’s important to utilize your resources wisely to give yourself the best chance to have your tax lien removed. One of those resources is the Internal Revenue Manual (IRM). This manual outlines all of the situations in which the IRS can issue a tax lien, which can give you a better understanding of how to get it removed. The state you live in should also have very well-documented resources for you to read regarding the issuance of a lien which you can use to get your lien withdrawn.
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What to Pay Attention To
When filling out Form 12277, questions 1-10 are relatively straightforward. The following questions, however, are a bit more complicated as they pertain to why the government should remove your lien. In these questions, it’s important to consider two things. The first is whose best interest removing the lien is in: the government or yours. You want to appeal to the government and explain why removing the lien is in THEIR best interest. The second thing to consider is the burden of proof that falls on you. That’s right. If you are trying to get a lien removed from your business, it is up to you to show the government why they should remove the lien.
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When filling out Form 12277, it’s important to outline why you were unable to pay your taxes and how that situation puts the removal of your lien in the government’s best interest. For example, sky-high bills related to medical problems causing issues with your tax payments may convince the government to remove your lien. If you are unsure about the removal of your tax lien, reach out to the tax attorneys at Key Tax Group today to find out how we can help you get your lien removed from your business!