A recent client came to me with a unique problem. He and his wife owed the IRS about $80,000. He was a NYS Judge and if the IRS filed a notice of federal tax lien (NFTL), it would be very embarrassing to him and since he handles business law cases, the Chief Judge may ask him to resign since the tax liens would effect his credibility in the court system.
The IRS wanted to file the NFTL to protect its interest. By law a NFTL gives other creditors notice that the IRS has a tax lien against your property. The tax lien itself (i.e. not the notice part) is created automatically once a taxpayer owes the IRS. Even after showing the IRS that the NFTL had no real value since the Judge had no assets (we obtained appraisals on all the taxpayers property), they still wanted to file the NFTL, even after we showed that it was not in there best interest to file the NFTL since the taxpayers ability to pay back the debt hinged on his ability to work and earn income.
We then went to the Taxpayer Advocate office. They assist taxpayers who are having difficulty dealing with the IRS. The office intervened and the IRS agreed that a NFTL would not be in the IRS or taxpayers best interest after we showed them a letter from the Chief Judge that my client ability to work required no public notice of this tax issue. We were able to establish an affordable payment plan to pay off the tax debt over five years without the negative effects of a tax lien.