How to Defer a Tax Lien

When you owe federal, state, local and property taxes and have not paid those amounts in full, the Internal Revenue Service can issue a tax lien against your property. This lien goes on your credit report and may prevent you from obtaining credit. You can prevent a tax lien from being issued by taking the proper steps to pay the outstanding tax bill. Read on to learn how to defer a tax lien.

Instructions

Difficulty: Moderately Challenging

Things You’ll Need:

• IRS Form 9465
• IRS Form 2159 (if applicable)
• Online Payment Agreement Form
• Supporting financial documents

1. Contact the IRS immediately if you do not have the financial means to make payments on your outstanding tax bill. You will be asked to provide financial information such as proof of current income and copies of monthly bills, such as a mortgage payment or monthly rent amounts, and car loan or lease amounts.
2. Get a copy of IRS Form 9465, also known as "Installment Agreement Request." This form is an application requesting to make installment payments on the outstanding tax bill. You will designate on the form the amount you are able to pay each month and the date you plan to begin payments.
3. Deduct tax payments from your paycheck. To ensure that a tax lien will be deferred, fill out IRS Form 2159, "Payroll Deduction Agreement." The monthly payment will be deducted from your paycheck and sent to the IRS.
4. Visit the IRS website to get started. All forms and agreements are available at the IRS website. You also may set up a payment arrangement with the IRS by completing the Online Payment Agreement form.

Tips & Warnings

• Wait until you receive a response from the IRS before you start making payments. After you have completed all of the necessary forms, the IRS will respond, usually within 60 days of receipt of your documents. Waiting to receive a response from the IRS will ensure that your tax account will be properly credited.
• Always include your social security number when sending payments via check or money order. If you do not include this information, your account may not be credited properly for you payments.