The Removal of Incorrect Tax Liens

Sometimes the IRS applies liens because of a simple error. For example, if you paid the tax, you may not have paid attention to IRS letters claiming otherwise. Gather up the paperwork proving the facts of the matter and visit the collection office that applied the lien. If you can resolve the issue there, the office will remove the tax lien. If you can't, then you'll have to take it to the IRS Office of Appeals. You can appeal even while you're still trying to work it out with the collections department.

When you claim the tax bill is incorrect, you have to apply to the IRS for a "collection due process" hearing by submitting form 12153. To get an appeal hearing, you have to show that you didn't have any opportunity to fix the problem. For example, if you never received the IRS notification letters about the alleged tax problem, that would be grounds for a hearing. So would a claim that the debt is really your spouse's and you shouldn't have to pay it.

Technically your county government places a tax lien on your property every Jan. 1, then removes it when you pay your property taxes for the year. If you don't pay, the lien stays on and the county eventually sells your land. Unlike a federal tax lien, which affects all property you own, a property-tax lien has to apply to a specific piece of real estate. If you owe back property tax on one piece of land but the county levies a lien on a different piece of yours, that's an incorrect lien even if the amount is correct.

Each county has its own procedure for challenging property-tax errors. Learn the local rules from the county website or call the tax assessor's office. Get it wrong — miss the deadline for filing an appeal, for instance — and you lose your chance to remove the lien, even if you're in the right. If the assessor made a simple error (like forgetting to include your resident homeowner exemption), it may be easy to fix. Otherwise you may have to do research to prove you owe less tax than the assessor claims.