From celebrities to the elderly, tax liens can affect anyone. The IRS can file a tax lien in the public records if a taxpayer owes taxes that are unpaid after the taxpayer receives notice of the taxes being owed and they remain unpaid after demand for payment. It is very important to try to avoid the filing of a tax lien if it has not already been filed. A proactive approach to a taxpayer’s problem may keep the IRS from filing a tax lien if certain criteria are met.
What exactly is a ‘tax lien’?
The tax lien is a claim against all of your property that arises once you have not paid your bill. If you don’t pay the amount due, the IRS can file a Notice of Federal Tax Lien at any time, if they haven’t already done so. The Notice of Federal Tax Lien publicly notifies your creditors that the IRS has a lien (or claim) against all your property, including property acquired by you after the Notice of Federal Tax Lien is filed. Once the lien’s notice to creditors has been filed, it may appear on your credit report and may harm your credit rating or make it difficult for you to get credit (such as a loan or credit card). It can also make it difficult to sell assets such as your home or business property or even get or keep a job.
What happens if I can’t pay a ‘tax lien’ that has been placed on my property?
A tax lien will generally stay in place until the tax is paid in full. In some situations, the IRS may subordinate its tax lien to permit the taxpayer to borrow to help pay the taxes or it may allow a discharge of the lien to permit the sale or transfer of assets such as a home or business property. These situations usually need the help of an experienced tax professional. If you are not able to immediately pay your tax obligations, you may have the option to structure a payment arrangement to pay the tax debt over time. The IRS often permits delinquent taxpayers to enter into installment agreements to repay outstanding federal income tax. These installment agreements can have different terms that depend upon the taxpayer’s tax debt and financial situation. We can help you get the best terms that fit your personal situation.
How can I get a ‘tax lien’ removed once it’s been issued?
Ultimately, to release a tax lien you must satisfy the debt by paying the amount owed including any additional interest or fees. It’s important to remember that even after you have paid your tax debt it may take an additional 30 days to release a lien. If you want to sell a house or business property and the sale will not pay the IRS in full, you will need to apply for a discharge of federal tax lien to sell the property. This application often takes at least 30 days for the IRS to respond.
Even if a tax lien has been filed, a recent change in IRS polices may allow the withdrawal of the lien’s notice to creditors even if the tax debt is not yet fully paid or the tax lien has not been released. You may also be able to have the federal tax lien withdrawn and removed from your credit report after you have fully paid your taxes and the tax liens have been released. The withdrawal of a tax lien will cause it to be removed from credit reports, which is often very advantageous and may even be necessary for some general employment situations or when there are regulatory or security clearance employment restrictions.
Our team of professionals can help you avoid having a tax lien filed or get a filed tax lien released or withdrawn.
For more information, call our Dallas, Texas, office at 972-960-2200. You can also contact us online today.