In situations where a taxpayer fails to pay the tax that is owed to the Internal Revenue Service (IRS), a Notice of Federal Tax Lien may be filed. This Notice can have a substantial negative effect on the taxpayer’s ability to sell, use, or finance his assets. The Notice impacts all assets, including, for example, real estate in Oklahoma City. If you find yourself in this situation, you may wish to apply for a withdrawal of the tax lien. This is done through the filing of an Application for Withdrawal of Filed Form 688(Y), Notice of Federal Tax Lien.
Five Reasons Permitted by the IRS
When completing your Application for Withdrawal, the IRS will require you to check the box next to the reason that corresponds with your request for the Withdrawal. The reasons permitted by the IRS include the following:
- The Notice of Federal Tax Lien was filed prematurely or not in accordance with IRS procedures.
- You entered into an installment agreement to satisfy the liability for which the lien was imposed, and the agreement did not provide for a Notice of Federal Tax Lien to be filed.
- You entered into a Direct Debit Installment Agreement.
- The withdrawal will facilitate the collection of the tax owed.
- You, or the Taxpayer Advocate who is acting on your behalf, believes that a withdrawal is in your best interest as well as the best interest of the government.
If more than one reason applies, it is acceptable to check multiple boxes. If the Notice of Federal Tax Lien was already released and you are seeking a withdrawal, you should choose the last box on Section 11 of the form, which states that you believe the withdrawal is in yours and the government’s best interests. In addition, you should include a detailed explanation of the events or the situation that support your reason for requesting the withdrawal. You are permitted to attach supporting documentation as necessary.
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