Form 656-B - Offer In Compromise Booklet Page 4
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32Notice of Federal Tax Lien
A lien is a legal claim against all your current and future property. When you don’t
pay your first bill for taxes due, a lien is created by law and attaches to your
property. A Notice of Federal Tax Lien (NFTL) provides public notice to creditors
and is filed to establish priority of the IRS claim versus the claims of other
creditors. The IRS may file an NFTL while your offer is being considered. However,
an NFTL will usually not be filed until a final decision has been made on your offer.
Note: A Notice of Federal Tax Lien (NFTL) will not be filed on any individual
shared responsibility payment under the Affordable Care Act.
Trust Fund Taxes
If your business owes trust fund taxes, responsible individuals may be held liable
for the trust fund portion of the tax. Trust fund taxes are the money withheld from
an employee's wages, such as income tax, Social Security, and Medicare taxes.
You are not eligible to submit an offer unless the trust fund portion of the tax is
paid or the Trust Fund Recovery Penalty determinations have been made on all
potentially responsible individual(s). However, if you are submitting the offer as a
victim of payroll service provider fraud or failure, the trust fund assessment
discussed above is not required.
Your Rights as a Taxpayer
Each and every taxpayer has a set of fundamental rights they should be aware of
when dealing with the IRS. Explore your rights and our obligations to protect them.
For more information on your rights as a taxpayer, go to
Taxpayer-Bill-of-Rights.
Other Important Facts
Penalties and interest will continue to accrue during consideration of your offer.
After you file your offer, you must continue to timely file and pay all required tax
returns, estimated tax payments, and federal tax payments. Failure to meet your
filing and payment responsibilities during consideration of your offer will result in
your offer being returned. If your offer is accepted, you must continue to stay
current with all tax filing and payment obligations through the fifth year after your
offer is accepted (including any extensions).
Note: If you have filed your tax returns but you have not received a bill for at
least one tax debt included on your offer, your offer may be returned.
An offer cannot be accepted for processing if the IRS has referred your case, or
cases, involving all of the liabilities identified in the offer to the Department of
Justice (DOJ). In addition, the IRS cannot compromise any restitution amount
ordered by a court or a tax debt that has been reduced to judgment.
The law requires the IRS to make certain information from accepted offers
available for public inspection and review. These public inspection files are
located in designated IRS Area Offices.
The IRS may levy your assets up to the time that the IRS official signs and
acknowledges your offer as pending. In addition, the IRS may keep any proceeds
received from the levy. If your assets are levied after your offer is pending,
immediately contact the IRS person whose name and phone number is listed on
the levy.
If you currently have an approved installment agreement, you will not be required
to make your installment agreement payments while your offer is being
considered. If your offer is not accepted and you have not incurred any additional
tax debt, your installment agreement with the IRS will be reinstated with no
additional fee.
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Parent category: Financial