1) If your tax liability gets discharged in a chapter 7 bankruptcy what are the criteria that the IRS uses to determine whether to remove the federal tax lien?
2) If the IRS refuses to remove the federal tax lien what are the criteria that courts use to determine whether to remove the federal tax lien?
Specifically to question 2, what does it mean to show that the lien is impairing your ability to claim an exemption?
There is no motion in the bky court process to remove an IRS lien. The IRS lien is a statutory lien.
The bky process to remove a lien is for judicial liens, not statutory.
However, the IRS internally does remove liens. Just ask. If the remaining assets subject to the lien are of inconsequential value, then can remove the lien. Also, keep in mind that if the tax itself is discharged, then the lien will just expire after time. After 30 years in practice, often this is what we do - just let the liens die a natural death.
This is general legal information, not intended to apply to your specific case. And I may not be licensed to practice in your particular state. Under Federal Law, I am a debt relief agent.
You can discharge the lien if you no longer owe anything. This is one of the things that allows for a release of lien. The IRS will generally remove a lien automatically after the liability is paid in full, but it can take a few months to happen. As the previous attorney stated, there is a process to remove the lien if they have dropped the ball.
However, if any taxes remain undischarged, they can keep the lien in effect until the liability is paid in full.
9 lawyers agree
Family Law Attorney
While I agree with the above in that they properly answered HOW to get a lien removed, I'm curious why you believe your tax debt was discharged in a Chap. 7 bankruptcy? Unless the debt is VERY old, it wasn't discharged, so the lien is still valid post-discharge since you still owe the debt.
This answer is not to be considered a response to a specific legal issue in a specific jurisdiction - it is to be considered only a general response to a hypothetical scenario posed by the questioner. For specific legal advice, please consult with a licensed attorney in your jurisdiction.
5 lawyers agree