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tax lien, tax lien certificate, irs tax lien

IRS TAX LIEN

A Tax Lien is a type of Collections action that the IRS frequently uses to force a taxpayer into payment of a tax debt.  A Lien is essentially a claim against the assets of a taxpayer who is in arrears with the IRS or a State taxation agency, and signals to his or her creditors that this person has a pre-existing debt to that agency which must be satisfied before the Liened assets will be returned to the taxpayer's complete control.  Although the affected assets are technically still owned and usable by that taxpayer, the Lien will act as a roadblock to prevent the sale or transfer of the property as long as the tax debt exists. This includes property acquired after the Lien has been filed. Only when the debt has been satisfied in full, will the Tax Lien be removed. 

A Notice of Federal Tax Lien will be filed by the IRS after they have assessed the liability, sent the taxpayer a demand for payment, and had that demand refused or neglected.  After 10 days from the time of notice, the Lien will go into effect.  A Tax Lien attaches to all physical property (such as real estate, automobiles, etc.) and also to any rights to property that the taxpayer may hold (a business's Accounts Receivable, for instance.) An IRS Tax Lien will cause serious damage to a person's credit rating and may eventually lead to asset seizure.


Tax Lien Release

If you have received a notice of Tax Lien, it means the IRS has caught you and it's time to pay up. Releasing a Tax Lien requires paying the debt in full, but there are options available to help you do so. Contact us for a FREE Consultation to determine if you qualify for relief:

 

 

 

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RELEASING AN IRS TAX LIEN

Unfortunately, a Tax Lien will only be released after the debt is paid in full. However, if the taxpayer cannot afford to repay the entire debt in one lump sum, it may be possible for him or her to file an Offer in Compromise to reduce and settle the tax debt. If this is not an option, then they can most likely establish a Payment Plan to pay off the debt over the course of the next few years. Keep in mind, this does not mean that the Lien goes away - in fact, it will still be a matter of public record until the debt is paid in full - but making a payment arrangement with the IRS will be the first step to getting the Lien out of the taxpayer's life.

Another possibility is to apply for Subordination of a Federal Tax Lien. In this procedure, the taxpayer requests that the IRS make the Lien secondary (i.e. - Subordinate) to that of another creditor so that the taxpayer can obtain some form of private financing. For instance, if a homeowner who owes a tax debt decides to take out a home equity loan, then he or she may petition the IRS to Subordinate the Lien to the interest of the lender while the loan is being processed. Of course, the IRS will only do so if the proceeds of the financing will be used to pay off the tax debt, or if they believe that Subordinating the Tax Lien will increase the amount that they can ultimately collect.

If a taxpayer decides to give up the property altogether, he or she can apply for Discharge of a Federal Tax Lien. Like Lien Subordination, this requires giving the IRS any proceeds from the sale over and above the closing costs and up to the total amount of the Tax Lien.

#1 Tax Relief has nearly 15 years of experience in dealing with Tax Liens and preventing further IRS Collections action. If you have received a Notice of Federal Tax Lien, please contact us right away, so that we can immediately address the tax problem that led to the Lien in the first place. We will assert your Taxpayer's Rights, prevent asset seizure and start you on the road to resolution.

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