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21
Connecticut CPA
g
May/June 2012
lows taxpayers to pay
their tax debt in smaller,
usually equal monthly
payments which are au-
tomatically debited from
the taxpayer's checking
account.
Suppose your clients
owe the IRS $30,000.
They would be eligible
for a withdrawal of the
federal tax lien if they met several re-
quirements. First, they would have to
pay down their balance to an amount
of $25,000 or less. Second, they would
have to fully comply with all other fil-
ing and payment requirements. Third,
they cannot have defaulted on current
or previous Direct Debit Installment
Agreements. Fourth, they cannot have
previously secured a loan withdrawal
of the lien on this same liability. And
finally, they must be able to pay their
entire balance within the earlier of 60
months or the expiration of the statute
of limitations on collection (typically 10
years from the date of assessment).
This means that if, for
example, your clients
enter into a Direct Debit
Installment Agreement
today and the statute
of limitations on collec-
tion expires on July 1,
2015, then your clients
must be able to pay the
entire $25,000 by July
1, 2015 instead of 60
months from today. If
all of these requirements are met, your
clients can request a withdrawal of the
federal tax lien after their third consec-
utive direct debit payment.
Conclusion
Taxpayers have available several op-
tions for securing relief from the federal
tax lien. This is why it is important for
anyone facing difficulties in paying their
taxes to be aware of the rules govern-
ing the imposition of the tax lien, the
priority of the tax lien, and the options
for relief from the tax lien. I hope the
three articles in this series have provid-
ed knowledge that can help you solve
your clients' tax problems in the most
effective and least disruptive way.
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Laura E. Pisarello, Esq. is an attorney with Convicer, Percy &
Green in Glastonbury. She concentrates in tax controversy,
including representation before the IRS and the Connecticut
DRS. She also handles probate matters, estate planning,
and business succession planning. She can be reached at
lpisarello@convicerpercy.com. Special thanks to Attorney
Eric L. Green for use of his materials and Attorney Richard G.
Convicer for his review and helpful comments.
The tax lien is
a powerful tool
for collection
that can have a
significant impact
on taxpayers' lives
and businesses.