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I currently have a tax lien in place for back payroll taxes.

Balance owing with interest and...
I currently have a tax lien in place for back payroll taxes. Balance owing with interest and penalties is approximately 18k. I have had a payment plan in place and have been current for two years. I have a business vehicle that I would like to sell and wanted to know if the proceeds have to go the IRS?
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Answered in 17 minutes by:
8/22/2013
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Verified

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

How are you tonight?

MyVirtualCPA :

I hate to be the bearer of bad news, but with an active tax lien the IRS would have claim to the proceeds of the sale.

MyVirtualCPA :

You can apply for a certificate of discharge of Federal Tax Lien on that piece of property

MyVirtualCPA :

and if granted, you could sell the property without having to give your proceeds to the IRS

MyVirtualCPA :

http://www.irs.gov/pub/irs-pdf/p783.pdf

Customer:

I received a different answer from another CPA that said its ok.

MyVirtualCPA :

What property does your lien cover?

Customer:

I believe its a blanket lien (does that make sense)?

MyVirtualCPA :

Yes, it does and if that's the case, then the IRS does have a claim to the proceeds of the sale, unfortunately

MyVirtualCPA :

You can sell clear of the lien, but you need to apply for that

Customer:

I read a different response from someone else on here that said that I could use the money how I wanted if there is a payment plan in place. Your answer is different from her answer.

MyVirtualCPA :

In my experience, you can't sell anything subject to a tax lien without IRS approval

MyVirtualCPA :

Typically if you have a payment plan the IRS releases the lien as you are making arrangements. If you still have it, unfortunately you would have to get clearance to sell property and not remit the proceeds to the IRS

MyVirtualCPA :

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Understanding-a-Federal-Tax-Lien

Customer:

Gerri Harrison stated in an earlier answer online that that is not the case if there is a payment plan in place. Is there anyway to chat with her on this?

MyVirtualCPA :

She has not answered a question on this site since 2011

Customer:

Is there anyway to chat with Gerri Harrison

MyVirtualCPA :

No, as she has not been on the site in two years

MyVirtualCPA :

I can turn this question into a moderator, who can see if they can get a hold of her and see if she's still active on the site

MyVirtualCPA :

But I don't think she's even active on the site

Customer:

I suppose the safest way is to talk directly to the IRS?

MyVirtualCPA :

I can give you contact information and some links to the IRS site - including the link I gave you earlier about the lien withdrawal

MyVirtualCPA :

According to the IRS, "


A federal tax lien gives the IRS a legal claim to a taxpayer’s property for the amount of an unpaid tax debt. Filing a Notice of Federal Tax Lien is necessary to establish priority rights against certain other creditors. Usually the government is not the only creditor to whom the taxpayer owes money.


A lien informs the public that the U.S. government has a claim against all property, and any rights to property, of the taxpayer. This includes property owned at the time the notice of lien is filed and any acquired thereafter. A lien can affect a taxpayer's credit rating, so it is critical to arrange the payment of taxes as quickly as possible."

MyVirtualCPA :

Options: When conditions are in the best interest of both the government and the taxpayer, other options for reducing the impact of a lien exist.


MyVirtualCPA :

Is there anything else I can assist you with today?

Customer:

No

Customer:

Did I get charged for all those questions?

MyVirtualCPA :

You only get charged for the questions you purchase - this conversation with me is only one charge

MyVirtualCPA :

Once you rate me as "excellent" it closes out the charge for you

Customer:

Thanks, XXXXX XXXXX going to call the IRS. I was confused as I thought I was going to be chatting with Gerri (had the box below her name and similar question next to it).

Customer:

Thanks, Jason

MyVirtualCPA :

Thanks Jason. Would you please take a moment to rate my response as "excellent" so that I may receive credit for helping you today? I am sorry that Gerri was not available - but, she has not answered a question in over 2 years. They really should only allow you to ask questions to active experts. I apologize for any confusion

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Verified
Megan C and 87 other Tax Specialists are ready to help you
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Thanks, Jason for your positive rating. Please come back and visit MyVirtualCPA for any of your tax, finance, or social security needs. It was a pleasure working with you today.
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Megan C
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
16,581 Satisfied Customers
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

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