So --- time is up and you can no longer Ignore the IRS. At this point you are forced to deal with your tax issues because the government can and will issue a tax lien or levy.

A Federal Tax Lien is the government’s legal claim against your property.  It is a pubic declaration that  the IRS believes that you have  neglected or fail to pay a tax debt - that the IRS believes you owe.   The purposes of a Federal Tax  lien is to  protects the government’s interest and in most cases a Fedral Tax Lien puts the IRS in a priority position in front of most of your creditors.

A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt.

What is a Federal Tax Lien?

Number of NFTLs Filed for Fiscal Years 2011 Through 2015

Over 1M Federal Tax Liens Filed

2011

Over 700K Federal Tax Liens Filed

2012

Over 600K Federal Tax Liens Filed

2013

Over 535K Federal Tax Liens Filed

2014

Over 515K Federal Tax Liens Filed

2015

Use Of Private Tax Collectors

Although the number of Federal Tax Liens have reduced over the years (largely due to budgetary constrains) the IRS has recently been authorized to use aggressive Private Tax Collectors. These private collection agencies are:






What is a Federal Tax Lien?

A federal tax lien exists after the IRS:

  • Sends you a bill that explains how much you owe (provides notice)
  • Assesses your liability (issues a tax bill)
  • You, Neglect or refuse to fully pay the debt in time.

The best way to remove a lien is to pay your tax debt in full. Typically, The IRS will releases your lien within 30 days after you have paid your tax debt.

10 Year Statute of Limitations to collect on a tax debt

The IRS has a long period of time to collect your taxes. The period is up to 10 years from the date the taxes were officially assessed.

On occasions the time period can be suspended (such as if the IRS is considering an Installment Agreement, a bankruptcy petition was filed and suspended collection activities of all creditors).

Options are available to pay or remove a tax lien

If you can’t pay the lien in full there are other affordable options available but you will need to be current with all of your filings before the IRS will consider removing the liens.

If you can’t pay the lien in full there are other affordable options available but you will need to be current with all of your filings before the IRS will consider removing the liens.

But first - make sure that you received proper notice?

Although IRS procedures instruct that joint liability taxpayers may have separate addresses and that lien notices must be sent to each spouse at his or her respective last known address, these procedures did not ensure that lien notices were sent to each spouse at his or her respective last known address




What is a Federal Tax Levy?

In the the video below the National Taxpayer Advocate discusses the impact that a Tax Lien has on your credit report.   For example some of these impacts include:

  • an 100 point drop immediately in your credit score
  • an immediate and potentially long last increase in the interest rate on any future loans or credit cards
  • a negative effect on housing applications
  • possible negative effects on employment applications
  • possible negative effects on inusrance rates
  • a diminishing of potential line of credit for small business owners

How a Lien Affects You:

  • A lien attaches to all of your assets (such as property, securities, vehicles) and to future assets acquired during the duration of the lien.
  • Once the IRS files a Notice of Federal Tax Lien, it may limit your ability to get credit.
  • The lien attaches to all business property and to all rights to business property, including accounts receivable.
  • If you file for bankruptcy your tax debt may continue after the bankruptcy.
What is the difference between a Lien versus Levy?

Lien vs. Levy

A Tax Levy is a legal seizure that actually takes your property (such as your house or car) or your rights to property (such as your income, bank account, retirement account or Social Security payments) to satisfy your tax debt.

What is a Federal Tax Lien?
  • A lien is not a levy. A 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.

Free Report: Fresh Start

Free Report: Installment Plans

Free Report: OIC

Releasing or withdrawing a Federal Tax Lien

Releasing or Withdrawing a Federal Tax Lien

It is possible to have the IRS to release a Federal Tax Lien. A “release” of a federal tax lien means that the IRS has removed both the tax lien and the Notice of Federal Tax Lien from public record. The IRS when requested will do this by filing a Certicate of Release of Federal Tax Lien.

It is possible to have the IRS to withdraw a Notice of Tax Lien. This serves only to remove the Notice of Federal Tax Lien from public record. However this doesn’t mean that the federal tax lien is released. In most case a person that recieves a withdrawal probabl still owes at least a portion of the tax debt.

Releasing a Federal Tax Lien

Withdrawing a Notice of Federal Tax Lien

A Federal Tax Lien can be released in cases were:

  • The Tax debt is paid,
  • You use a a bond to guaranteed payment of the tax debt, or
  • an Offer in Compromise is accepted by the IRS or
  • The period for collection has ended.

A Notice of Federal Tax Lien can be withdrawn in some cases if:

  • An Installment Agreement is agreed to by the IRS (especially use a direct debit installment agreement),
  • The IRS makes a mistep in following certian techincal procedures,
  • You are involved in a bankruptcy (with an automatic stay)

Free Report: Fresh Start

Free Report: Installment Plans

Free Report: OIC