What if the Internal Revenue Service places a tax lien on me?

tax lien

What is a tax lien?

According to the Internal Revenue Service’s own definition, “A tax lien secures the government’s interest in your property when you don’t pay your tax debt. A levy actually takes the property to pay the tax debt. If you don’t pay or make arrangements to settle your tax debt, the IRS can levy, seize and sell any type of real or personal property that you own or have an interest in.”

Once someone owes in excess of $10,000 and does not pay in full within 30 days of a demand notice, they can expect the IRS to routinely file a tax lien in the local courthouse. 

How a tax lien affects You

A tax lien can impact you in the following ways:

  • A lien attaches to all of your assets and to future assets acquired during the term on the lien.
  • It can also impact your ability to get credit for the duration of the lien.
  • For a business, a lien attaches to all business property and to all rights, including accounts receivables.
  • A Notice of Federal Tax Lien may continue after the bankruptcy.

How to Avoid a Tax Lien

You can avoid a federal tax lien by simply filing and paying all of your taxes in full and on time. And if you can’t file or pay on time, don’t ignore the letters that you receive from the IRS.

What can you do if you have a Tax Lien?

We have been successful in special circumstances in requesting the Internal Revenue Service to not file a lien if it would harm the taxpayer’s ability to earn income or to pay off a tax bill. You do not, however, have to let the lien put you in a Catch-22 situation. It is normal for us to arrange on your behalf to have a lien subordinated to your bank, or to even be discharged completely, if the IRS will be paid in full or in part upon the discharge or release of the lien. Additionally, we can help you plan to make the best in the event a lien has been filed, and to plan your affairs in advance of an expected lien.

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