An IRS tax lien is a legal claim against your property when you neglect or fail to pay back taxes. An IRS tax lien protects the government’s interest in all your property. IRS tax liens are filed against anything of value which you own. This can be your home, business, automobiles, jewelry, or any other property. An IRS tax lien is a public announcement of your back tax debt and gives the IRS precedent over any other creditors.
The IRS files a public document, the Notice of Federal Tax Lien, to alert creditors and all others that the government has a legal right to your property. This public knowledge is available at the county recorder’s office in which you reside and therefore a plethora of junk mail will head your way for tax resolution companies wanted to help you out because of the tax lien. These companies may promise you the world, but release of that tax lien can only be done by the following mechanisms:
- Full payment of the tax liability
- Successful completion of an Offer in Compromise
- Streamline Installment Agreement after good faith established
- Offer to full pay within 120 days of the assessed balance
- Expiration of the statute of limitations
Tax liens will affect your credit, will make it difficult for you to obtain a home or sale a home, and in many circumstances, this type of lien can survive a bankruptcy discharge. Tax liens are dealt with as the resolution is being worked on, but by entering a streamlined payment plan, they can be avoided. Further, a settled offer can also remove the possibility of a lien.
A lien is not a levy. A lien secures the government’s interest in your property, while a levy takes your property to pay the tax debt. However, tax liens can be publically humiliating, and can deter your ability to move and obtain credit.
When the IRS files a tax lien, it means that you matter has been placed in active collections and you need to take action to avoid further collection actions such as bank levies and wage garnishments. Platinum Tax Resolution professionals specialize in assisting clients in having their federal tax lien issues resolved once and for all. While this process is not a quick one, it is a necessary process to protect you from the actions of the IRS and we have been successful in providing this relief to many taxpayers.