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Can I get a Federal Tax Lien removed in a chapter 7 Bankruptcy?

Pinellas Park, FL |

A Tax lien was filed against me in March of 2008 for Back taxes I have no property or assets and Did not when the lien was filed . But it keeps me from moving on with my life , The lien is not attached to anything but my name will chapter 7 Bankruptcy help.

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An IRS tax lien will attach to any assets you own now or acquire in the future. If the underlying debt is discharged in bankruptcy and the lien has not attached any equity then the lien will be released. If you're considering bankruptcy you may qualify for an offer in compromise with the IRS which will accomplish the same goal with regards to the tax debt, but will not resolve any other general creditor debt you may have. Also, the IRS announced new rules for lien withdrawals in May of last year which you may qualify for. Please see links below:


The answer to whether or not you can have the lien removed in bankruptcy will likely depend on whether or not you have timely filed all returns that are causing you the issue with your back taxes. Seek a Florida licensed bankruptcy attorney who understands how the IRS treats tax liens in a bankruptcy.

You could also consult a Florida licensed Tax Attorney in order to discuss what is known as an "Offer in Compromise" with the IRS. This may ultimately wind up being a better option for you.


As mentioned by the other attorney, the result of the bankruptcy discharge will depend upon the relationship between the tax year(s) at issued, the date on which the return was filed, the date of assessment, whether an offer in compromise was made, and the date of the bankruptcy filing. The only way to determine whether your bankruptcy case will result in discharge of the tax debt is to obtain transcripts of the tax account from the IRS and compare the information thereon to the requirements of the Bankruptcy Code at sections 507, 523, and 727. Just to be technically correct, the lien will not be "removed" by the bankruptcy, but the discharge of the tax debt will prevent the lien from attaching to anything you obtain after the filing date of your bankruptcy case.

I strongly recommend that you consult with knowledgeable counsel on theses issues.

Posting questions anonymously and receiving general answers do not substitute for consulting with an attorney licensed to practice in the jurisdiction in which you live. Answers posted here by Kevin C Gleason are only intended for general education of the public on legal matters. Please consult a qualified professional before deciding what to do about your situation.


One issue would be when the taxes were assessed and how much back taxes were owed. Generally, if you were not aware during your bankruptcy, the tax lien would still be in effect because only under limited circumstances are federal income taxes dischargeable in bankruptcy. I would need more information to give you a complete answer. Contrary to whatever you may hear, some IRS taxes may be dischargeable, with the approval of the IRS insolvency dept. The taxes would have to be discharged or paid in order for the lien to be erased (but you still could have a 'hidden' lien under some circustances)


Since the lien was filed in 2008, the underlying taxes will be dischargeable assuming they are not the result of an effort to evade or defeat a tax, and assuming they are not the penalty for failure to withhold and remit 941payroll taxes. The discharge of the debt, however, is not the only consideration. A tax lien survives a bankruptcy discharge, and remains attached to your world-wide real and personal property.

The problem with Chapter 7 is that it does not offer a method to value the IRS's lien. In a Chapter 13, you can file a motion to value it's liens on your real and personal property. My experience is that the IRS will not even contest your motion to value in a 13 as long as your figures are reasonable. So, if you are a lower income individual, 13 offers you the opportunity to make some affordable plan payments for 3 years and wipe out the IRS and all the other creditors as well.


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