Schwarzenegger tax lien cleared

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The Internal Revenue Service is no longer leaning on Gov. Arnold Schwarzenegger. The federal tax agency has removed a nearly $80,000 lien it placed on property last year, because the supposed debt was an error, the governor’s office said Friday.

Schwarzenegger’s aides had said the lien, from the tax years 2004 and 2005, stemmed from confusion by the IRS and the federal Social Security Administration over the reporting of payments for the governor’s household employees in Brentwood.

The two agencies were not able to reconcile the tax returns filed by Schwarzenegger with the payroll forms he sent to the Social Security Administration because the tax returns used his Social Security number as a reference and the payroll forms used an employer identification number.

TMZ.com reported the discharge of the tax lien Friday morning. A form certifying the release was filed on Jan. 28 at the Los Angeles County recorder’s office, according to a document posted online by TMZ.

[Updated at 12:39 p.m.: The lien was released on Jan. 20, according to a document provided to The Times by the governor’s office. Schwarzenegger’s spokesman, Aaron McLear, said the Jan. 28 document posted by TMZ related to fees. He said the governor’s staff was notified that the lien was cleared on Thursday.]

-- Michael Rothfeld in Sacramento