Direct Debit Installment Agreements and Federal Tax Liens

In recent years, the IRS has made several fundamental changes; one of them affects federal tax liens. Where taxpayers enter into a Direct Debit Installment Agreement (DDIA) with with unpaid assessments of $25,000 or less, the IRS will now allow lien withdrawals under several scenarios:

1. Lien withdrawals for taxpayers entering into a Direct Debit Installment Agreement.
2. The IRS will withdraw a lien if a taxpayer on a regular Installment Agreement converts to a Direct Debit Installment Agreement.
3. The IRS will also withdraw liens on existing Direct Debit Installment agreements upon taxpayer request.

Liens will be withdrawn after a probationary period demonstrating that direct debit payments will be honored. In general, 3 consecutive direct debit payments (see below)

Other conditions that apply to lien withdrawal are:

1. You are in full compliance with other filing and payment requirements
2. You have made three consecutive direct debit payments
3. You can’t have defaulted on your current, or any previous, Direct Debit Installment agreement.