If you have gotten behind on your taxes, you may have a federal tax lien or Illinois tax lien on your home. If you want to sell your home to get out of tax debt, you’ll need to resolve your federal or state lien first.
While you can contact the IRS or state of Illinois by yourself, you’ll get faster results by working with a lawyer to remove an IRS tax lien. Working with the IRS can be challenging, and a good Illinois tax lawyer can review your situation and help you remove your federal or state lien as smoothly as possible.
How to Remove an IRS Tax Lien
The most common way to remove an IRS tax lien is by getting it withdrawn. When your lien is withdrawn, it’s as if the lien never existed. It no longer applies to the property.
A federal lien can get withdrawn for four reasons:
- Withdrawing the lien will help facilitate tax collection
- It was premature or did not follow standard IRS procedures
- Withdrawing the lien is in the best interest of both the IRS and the taxpayer
- The taxpayer signed onto an IRS payment plan, which does not authorize a tax lien
Another way to remove your lien is through a discharge. If you anticipate that the IRS or state will place a lien on your home, you can request that they discharge it so you can sell your home and use money from the sale to pay off your tax debts. Act quickly to get your home on the market and sold before the lien can go into effect.
How to Remove an Illinois Tax Lien
If you receive a notice that you owe taxes, the easiest thing to do is pay them. But because paying the lien is not always an option, some of the methods available for Federal Tax Liens will also apply to state tax liens.
State Tax Liens Are Different from Property Tax Liens
Property taxes are secured by a lien on the real estate. If you don’t make tax payments in Illinois, the county can place a lien on your property. This gives them the authority to sell your lien to a tax buyer at auction. If you don’t repay your taxes in time, the tax buyer can eventually become the legal owner of the property and will be able to evict you.
If you believe that there are tax exemptions you qualify for that have not been applied, you can file certificates of error. The act of filing should temporarily remove your home from the tax sale process as the county takes time to review your claim.
If you cannot pay the amount within 30 days and your tax debt gets sold, you will have another 30 months to redeem the taxes to the County Clerk. During this time, you can work with your mortgage company to find out if they can pay the taxes for you and add the cost to your existing mortgage. You should also contact a lawyer who can help you figure out the best solution.
Can Bankruptcy Remove a Tax Lien?
Declaring chapter 7 or chapter 13 bankruptcy can help you pay off certain types of debts. Unfortunately, declaring bankruptcy won’t remove a tax lien from your home. It could still be a worthwhile option, though, if doing so allows you to clear out other debts and frees up cash that you can put toward paying off your tax debt.
If you have a tax lien or anticipate that one will be placed on your property, act quickly. Contact us today to find out how we can help you remove your tax lien.