How to Bank With Tax Liens
- 1). Obtain separate bank accounts for anyone you have a joint account with. Any account where either party has the freedom for unlimited withdrawals on the account is subject to a lien. If you have accounts that are "joint with rights of survivorship," a lien can be placed on this account. This is common where children are on an elderly parent's account. While you can file for "wrongful seizure," it may take time to recover the assets. Be proactive.
- 2). Pay off the debt. This is the quickest way to get the IRS off your back and remove tax liens. If there is a way to borrow assets from friends, family or other assets to do this, you may save yourself a lot of other hassles by having the lien on the bank account.
- 3). Obtain a bond and submit it to the IRS guaranteeing payment of the debt. This should transfer the lien onto the bond asset, not the accounts. The IRS may still maintain the lien as a secondary lien until the debt is paid.
- 4). Apply for a "discharge of a federal tax lien." You need to file this for each bank account as a discharge is effective for only one asset. In the application, explain that this asset is either not your asset or otherwise needs to be unencumbered.
- 5). Prepare an application to make the federal tax lien secondary some other debt you owe. Refer to IRS Publication 784 for the application.
- 6). Appeal the lien. The IRS gives you five days upon receiving the lien notice which is sent to your address or business by certified mail. This will start a due process hearing in the Office of Appeals.
- 7). Operate on a "cash" basis as much as possible. This means keeping as much money out of the bank accounts as possible so you don't have assets taken that you need for necessities such as food and home expenses.
Source...