Sam Brotman, JD, LLM, MBA October 18, 2013 8 min read

IRS Tax Lien Release - Part One - Avoiding a Lien


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law

Introduction to IRS Tax Lien Release

One of the biggest debates in the tax practitioner community is the efficacy of IRS tax liens. On one hand, IRS tax liens help the government protect its interest in a taxpayer’s property and secure the underlying tax obligation with real or tangible personal property. On the other hand, liens damage a taxpayer’s credit, place an obstacle in the way of the taxpayer selling that property or borrowing against it in order to pay off their liability, and generally do nothing to satisfy the immediate concern of the IRS. Furthermore, it is extremely difficult to get a lien release and liens are a noted hassle to dispose of once they have been filed against a taxpayer. However, there are a number of things that the taxpayer can do if they are affected by a federal tax lien in order to secure a lien release or achieve some other workable solution that allows them to make progress on the account. After all, the IRS is simply seeking a workable resolution to the problem.

Avoiding an IRS Tax Lien

First of all, although it may go without saying, the easiest way to not have to worry about federal tax liens is to not get them in the first place. Being compliant with your federal tax obligations is a one hundred percent guaranteed way to avoid a tax lien. Even if you are not entirely compliant though, getting a head start on a workable resolution is a great way to avoid a lien. Generally speaking, it is much easier to avoid a lien in the first place than having to worry about having to secure its release later. As such, if you get out in front of your IRS tax obligation and are proactive about getting on a payment plan or making arrangements to full pay the liability, you will likely avoid a lien. Tax liens, in any form, utilize IRS resources to get put into place. If the IRS knows that you are working on resolving your tax issue, it will likely deprioritize placing a lien your account. As the IRS states on its websites, tax liens are reserved for taxpayers who are notified that they have a balance due and do not take steps to resolve their liability.[1] As such, simple contact with the IRS goes a long way in avoidance of a federal tax lien.[2]

Along those lines, the IRS generally does not go through the trouble of placing a lien on taxpayers who owe smaller liabilities. Under the new IRS Fresh Start Program, the IRS raised the threshold for placing a federal tax lien on an account from five thousand dollars to ten thousand dollars.[3] This does not necessary mean that the IRS will not place a tax lien on you if you owe less than ten thousand dollars, but generally, absent truly compelling circumstances is it not going to bother. If you owe slightly more than ten thousand dollars, you might consider making a partial payment to the IRS in order to drop yourself under that threshold. If you owe more than ten thousand dollars, but less than twenty five thousand dollars, placing yourself on an installment agreement prior to a lien being filed will also usually prevent a tax lien from being filed in the first place. In certain circumstances, usually by agreeing to have my clients set up on direct debit, I have also avoided tax liens for my clients who have balances of up to fifty thousand. In general, the IRS is going to take a harder look at accounts with balances over fifty thousand dollars, so for lien avoidance purposes it is definitely advisable to keep yourself under this threshold.

Continue to IRS Tax Lien Release - Part Two - Lien Withdrawal

Need help with an IRS tax lien? Please visit any of the following for more information.

Tax resolution services for small businesses and mid-size businesses (business tax resolution)

Tax resolution services for self-employed individuals and independent contractors (individual tax resolution)

Tax resolution services for individuals and families (individual tax resolution- W2 and wage earners)

Legal representation before IRS collections

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Last updated: July 2, 2022

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Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law



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