Dealing with an IRS tax lien can be overwhelming, but there are ways to temporarily pause or remove it while you settle your tax debt. The IRS offers several options for individuals and businesses struggling to pay off back taxes. Understanding these options and taking the right steps can help you avoid further financial trouble and regain control of your assets.

An IRS Tax Lien is Solvable

A tax lien is a legal claim by the IRS against your property due to unpaid taxes. This lien applies to your personal and business assets, including real estate, bank accounts, and vehicles. If left unresolved, it can severely damage your credit and make it difficult to sell or refinance property.

Ways to Put a Tax Lien on Hold

The IRS provides several methods to either pause the collection process or reduce the impact of a lien. Here are the key strategies:

1. Request a Collection Due Process (CDP) Hearing

If you’ve recently received a lien notice, you have the right to file a Collection Due Process (CDP) request within 30 days. This hearing allows you to challenge the lien or negotiate an alternative resolution.

  • File Form 12153 (Request for a Collection Due Process or Equivalent Hearing) with the IRS.
  • Explain why the lien should be paused or removed.
  • Offer an alternative such as an Installment Agreement or Offer in Compromise.

2. Apply for an Installment Agreement

If you can’t pay the full tax debt upfront, the IRS may allow you to set up a monthly payment plan. While the lien remains in place, an Installment Agreement can prevent further collection actions.

  • Guaranteed Installment Agreement (for debts under $10,000) is easy to qualify for.
  • Streamlined Installment Agreement (for debts up to $50,000) does not require a financial disclosure.
  • Regular Installment Agreement (for debts over $50,000) requires financial documentation.

Once an agreement is in place, you can request a Lien Withdrawal by filing Form 12277 (Application for the Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien).

3. Submit an Offer in Compromise (OIC)

An Offer in Compromise allows you to settle your tax debt for less than the full amount owed. If accepted, the IRS may pause the lien while they review your offer.

  • Use the IRS Offer in Compromise Pre-Qualifier Tool to check eligibility.
  • Submit Form 656 (Offer in Compromise) along with financial documents.
  • If approved, the IRS releases the lien upon completion of payment.

4. Request “Currently Not Collectible” (CNC) Status

If you can prove financial hardship, the IRS may classify your account as “Currently Not Collectible (CNC)”, meaning they temporarily stop collection efforts, including liens.

  • Submit Form 433-A (Collection Information Statement) for individuals.
  • Prove that paying taxes would cause significant financial hardship.
  • If approved, collections (including liens) are paused, but interest may still accrue.

5. Apply for a Lien Discharge, Subordination, or Withdrawal

Even if the lien remains, you can reduce its impact by requesting one of the following:

  • Lien Discharge – Removes the lien from a specific property, allowing you to sell or refinance.
  • Lien Subordination – Allows other creditors to take priority over the IRS, making refinancing easier.
  • Lien Withdrawal – Removes the public notice of the lien but does not eliminate the debt.

To apply for these, you must submit Form 14135 (Application for Certificate of Discharge of Property from Federal Tax Lien) or Form 14134 (Application for Certificate of Subordination of Federal Tax Lien).

What Happens After You Resolve the Debt?

Once your tax debt is paid or settled, the IRS will release the lien within 30 days. You can then request a withdrawal of the lien from public records by filing Form 12277.

Final Thoughts: How Liberty Land Traders Can Help

If you’re facing an IRS tax lien and need to sell your property, time is of the essence. Ignoring the issue can lead to further complications, delaying your ability to close a sale or access your equity. At Liberty Land Traders, we understand how tax liens can put property owners in a tough spot, and we’re here to help.

Our team can guide you through the process of pausing or resolving a tax lien so your property sale isn’t held up. Whether it’s working with the IRS to secure an Installment Agreement, Offer in Compromise, or Lien Discharge, we’ll help you take the right steps to clear the way for a smooth transaction.

If you need to sell your land quickly but a tax lien is standing in the way, don’t hesitate to reach out to Liberty Land Traders. We work with sellers in challenging financial situations to ensure they get a fair price for their property—without unnecessary delays. Let’s find the right solution and get your sale moving forward today!