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I was first deemed non-collectible by IRS, then they put a tax lien on me. How can I resolve this. it is for about $20,000. Also

West Palm Beach, FL |

I was first deemed non-collectible by IRS, then they put a tax lien on me. How can I resolve this. it is for about $20,000. Also, will it stop me from receiving a lawsuit settlement??? Will they stop the settlement payment, or chase me afterwards? How can I best clear this up??

Attorney Answers 3

  1. Best answer

    The actual status is "not CURRENTLY collectible." That means the IRS will review this every 2 or 3 years until the 10 year statute of limitations applies. The federal tax lien is the equivalent to a judgment and goes on your credit records. It would not prohibit you from receiving your lawsuit settlement payment although if the IRS Revenue Officer finds out about it, the RO can levy on the payment or income stream.

    After you receive the settlement, you should consider getting a tax attorney to help you negotiate with the IRS.

    I hope this helps!

    Ron Cappuccio

    If you do not like this answer or disagree, please look at one of the other answers provided. It is not necessary for you to try prove this answer is "wrong" or something with which you do not agree. This is a free service for you based on limited facts. Nevertheless, many times you need to consult an attorney with the details to get actual advice specific to your concerns. Do not put too many details in your questions or comments because this makes the information public and could hurt you. Government Regulations contained in IRS Circular 230 regulate written communications about Federal tax matters, including e-mail, between us and our clients. This is another attempt by the government to limit your rights and to extend the control of government over individuals and businesses. Nevertheless, such communications are either opinions or other written communications. This is not an opinion. It is other written communication and was not written to be relied upon, by itself, to avoid any tax penalties. In order to receive assurances of protection from tax penalties from a written communication, you should get an opinion letter. If you would like to discuss an opinion letter relating to any matter, please contact me and I will explain what is involved and what it will cost.

  2. The lien protects the IRS and can only be removed when you either pay what you owe, or you are in a full pay installment agreement. Unless the IRS somehow is aware of your lawsuit, and even if it knows of it, it is highly unlikely they would take any of your lawsuit proceeds.

    Postings provided on this forum are informal and do not establish an attorney client relationship. To discuss your matter further please call my office at (760) 340-1800 in Palm Desert or (909) 469-5127 in Pomona. In most instances I offer free consultations.

  3. Unfortunately whenever the balance is above $10,000 they can file a lien and typically whenever they qualify you for currently not collectible status they file a lien. However, if you enter into an installment agreement where you agree to pay the debt off over the next six years you can get the lien removed and even get it off your credit report. If you can afford to pay around $300 you can get the lien removed. Also, if you can show that it is in the best interest of the IRS to remove the lien they might do so. If the lien would cause you to lose your job or if you could get a much higher paying job if the lien were removed you may be able to convince the IRS to remove the lien.