Here's a question I was recently asked: "If you are upside down on your house and the IRS has filed a Notice of Federal Tax Lien, will the IRS remove the lien? "
Being "upside down on your house" means that you have negative equity in your home loan or mortgage.
So what's the answer? Not likely.
The IRS doesn't care if you own property when they file a lien. When the IRS files a Federal Tax Lien, it is basically because you owe money and they want to get paid. The fact that today, you have no equity or interest for the IRS to attach, is irrelevant. The Federal Tax Lien is meant to harass you into compliance. If you don't have any equity, the lien will make it very difficult for you to ever get any; so the IRS wants you to pay them off first.
It is possible to get liens withdrawn if it can be proven it is beneficial to the government to do so. Liens can also be subordinated in cases of refinance, as long as the IRS gets a little taste of the proceeds. Both withdrawal and subordination are requests we have successfully negotiated with the IRS.
If you have a lien or tax issue you are concerned about, contact us. We can help. Call us at 888-727-8796 or email firstname.lastname@example.org.