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March 22, 2013

Internal Revenue Service Offer-in-Compromise Program

    The tax attorneys at Nardone Law Group frequently advise our clients in Ohio and throughout the U.S. on various collection alternatives in dealing with the Internal Revenue Service.   Taxpayers who find they are unable to pay their taxes and their associated penalties should know that the single worst course of action is inaction.  To help alleviate their concerns, we typically talk to our clients about the following alternatives: (i) Offer-in-Compromise; (ii) Installment Agreement; (iii) currently not collectible status; and (iv) discharge of income taxes in bankruptcy, as well as a combination of several of those alternatives.

    As it relates to an Offer-in-Compromise, we have found that many taxpayers or their tax professionals fail to follow through with completing the entire process.  What we mean by that is: once the IRS accepts a taxpayer's offer, there are numerous tasks that remain to be completed.  One of those tasks involves dealing with the Notice of Federal Tax Lien and minimizing the impact that the Notice of Federal Tax Lien has against a taxpayer’s credit.  As an example, an unpaid tax lien can remain on your credit report for 10 years. Further, once the tax lien is paid and released, the lien does not immediately come off of your credit report. Rather, the record of the tax lien stays on your credit report for up to 7 years from the date of release.

    Thus, it is important to make sure that you obtain a Certificate of Release of Federal Tax Lien as soon as possible. Once the Offer-in-Compromise has been completed and approved by the IRS, a Form 668 (Z) Certificate of Release of Federal Tax Lien will be filed with the county recorder’s office. Once the Certificate of Release of Federal Tax Lien is filed with the recorder’s office, it is important to obtain a copy of the recorded release and send a copy to the three credit bureaus: (i) Equifax; (ii) Experian; and (iii) TransUnion. The release should be forwarded to each credit bureau requesting that they update their records to reflect that the tax liens have been removed.

    In sum, recognizing that the Notice of Federal Tax Lien remains on a taxpayer's credit report for 7 years, it is important to obtain the release of the Notice of Federal Tax Lien as soon as possible.

    Nardone Law Group represents individuals and businesses with federal tax issues, including those who have fallen behind on their tax payments to the IRS. The tax lawyers at NLG have vast experience in representing individuals who owe money to the IRS. A recent article about IRS collection alternatives can be found here. If you are struggling with tax liabilities or are interested in working with the IRS to review collection alternatives, you should contact an experienced tax attorney today. Our experienced tax lawyers will thoroughly review your case to determine what options and alternatives are available. Contact us today for a consultation to discuss your case.

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March 22, 2013

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