Tax Liens Sales

If you enter a payment plan agreement for a federal tax lien is the lien released if you stay current?

I have a client filing for financing and we can not help him because of a tax lien on his credit. He says he has been in a payment plan for over one year. His attorney and accountant are under the impression that the actual lien should be removed from his credit as long as he is current in his agreement. If so, how does he go about getting it removed?

Public Comments

1. r u serious?,,,,the lien has to be paid in full...
2. Um... no. Law and finance aren't based on intentions, or what might happen in the future. They are based on reality, and what really did happen in the past. The lien will be removed when the debt is paid.
3. Generally no. The lien would be released once the debt was cleared. If this is a lien by the IRS the IRS might be willing to take a second position to allow the financing to go through. Your client will have to contact the IRS and ask. If it's a matter of the lender refusing because of the mere existence of the lien then your client is up the creek without the proverbial paddle at least with that lender.
4. A release of lien is proof that the taxpayer no longer owes the tax shown on the lien so it can't be released unless the account is paid in full or abated for some reason. What is the purpose of your client's financing? If it is to purchase something, the purchase money security would have priority over the tax lien. If it is to refinance at a lower rate, IRS can subordinate its lien to the new loan but you have to go through an application process.