Boulder, CO: The IRS Filed a Federal Tax Lien By Mistake - Now What?

Education & Training with Apex Tax Defense LLC

I focus my practice on tax resolution, representing taxpayers in ColoradoFloridaTexasNew YorkCalifornia and elsewhere. Recently I had a client who owed less than $50,000 and wanted to set up an installment agreement, but also wanted to avoid getting hit with a tax lien filing. Generally, this is done by doing what is called a direct debit installment agreement, where forms are sent into the IRS, and once all documentation is processed, the IRS automatically withdraws the money out of your bank account.

After properly setting up the agreement, we all thought it was a done deal. I was told by the IRS agent that the client would receive documentation by mail in 10-14 days regarding the agreement, and the payments would be automatically withdrawn starting the next month. Excellent. But, no. Three weeks later, a notice arrives stating a Federal Tax Lien had been filed - HUH? How was this possible? Everything was done in the proper fashion - what went wrong? So, it was back on the phone with the IRS.

After waiting the usual 30 plus minutes, I was informed that yes indeed, the agreement was in place, but they couldn't tell me WHY the lien was filed. So, it was on to the next phone call with the lien department. Waiting almost two hours on hold, the answer was....we don't know. Surprised? Me either. The good news is, there are remedies to ultimately fix the error. One way is to file Form 12277, Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien. Another option is to appeal the collection through Form 12153, Request For Due Collection Process or Equivalent Hearing. I expect this to be cleaned up, but of course it will take some time.  

This situation can be and is very stressful. Fortunately, with the right guidance and experience, matters like this can be resolved.

If you or someone you know has back taxes to deal with, don't hesitate to contact us immediately at 303-499-2700 or by email at


Michael Moran, CEO, EA

Apex Tax Defense LLC

825 S Broadway

Boulder, CO 80305

Phone: 303-499-2700

Fax: 888-478-7627

Comments (1)

Roy Kelley
Retired - Gaithersburg, MD

I was looking for your current posts. I hope all is going well for you.

Have a very productive spring.

May 09, 2020 08:06 AM