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Q: Question regarding invalidity of Federal Tax Lien ( Answered,   0 Comments )
Subject: Question regarding invalidity of Federal Tax Lien
Category: Business and Money > Accounting
Asked by: wg06ajax-ga
List Price: $30.00
Posted: 09 Jun 2006 12:24 PDT
Expires: 09 Jul 2006 12:24 PDT
Question ID: 736763
I am looking for information on validity of Federal Tax Liens.

Here is the chronology of events:

1. In June 2005, my year 2000 tax balance was credit balance.
2. In August 2005, Federal placed a lien on my account for years 2000 and 2001.
3. In June 2006, my year 2001 tax balance was also credit balance.
4. In June 2006, my Lien has been released.

So the Lien was placed after my balance for year 2000 was zero.  I am
trying to figure out if I can get the Lien withdrawn.  If you have
specific information about invalidating the lien please respond.  I
have URLs that point to IRS Lien withdrawal process.  I am looking for
specific information in context of situation above.

Subject: Re: Question regarding invalidity of Federal Tax Lien
Answered By: taxmama-ga on 11 Jun 2006 12:02 PDT
Dear wg06ajax,

Did you file tax returns for the years 2000 and 2001?

Normally, if you had filed your tax return for 2000 by the due date,
even including extensions, of October 15, 2001 - you would have either
no balance - or a balance due by June of 2005.

No balance? If you'd had a refund coming - you would have received it. 
Balance due? If you'd owed money, but hadn't paid it - you'd still owe it,
plus penalties and interest.

But you say that in June of 2005, IRS records showed a credit balance?
There's primarily one way to achieve that - you didn't file the tax return.

So, odds are, in August 2005, IRS gave up waiting for you to file the tax 
return and prepared and SFR (substitute for return), preparing your tax 
return without any deductions or credits to which you might have been 
entitled. That is what probably resulted in a balance due. 

They undoubtedly did the same thing for the year 2001, but ended up 
with a refund, or no balance due and utlimately removed the lien.

What can you do to get the lien for the year 2000 released? 

Simple. File a tax return. 

Demonstrate to IRS that you do not, in fact, owe them any money from 2000.

Once IRS accepts your return, it will take a while before you can get the
lien desk to remove the lien; but they will. 

As to any refunds due from 2000 or 2001 - you've lost your right to
collect them. You only have until three years after the due date of
any tax return to collect any refunds due. After that, unless you
have some compelling reasons not to have filed, you simply forfeit
them into IRS's coffers. 

If this isn't what happened and you need more information, please
don't hesitate to ask - and I'll be happy to provide guidance.

Best wishes,

Your TaxMama-ga
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