Tax Liens

Many people who receive tax liens don’t fully understand what they are, what consequences they bring, and how to get out from under them. Fortunately, with a better understanding and the right help, your tax lien can be dealt with much more quickly and successfully.

Tax Crisis Institute has been helping families in our communities get their tax liens removed successfully for over 30 years. As a family-run business, we take personal interest in your unique circumstance. When you work with Tax Crisis Institute, we’ll sit down with you face to face to find a way to get your tax lien removed.

What is a tax lien?

A tax lien is basically the seizure of your personal assets as collateral for unpaid taxes by either the federal or state government.

In order for the government to institute a tax lien, they will first assess your specific case and your liability. Then they will send you a bill that explicitly lays out how much money you owe. This document is called a “Notice and Demand for Payment.”

If, after receiving this document, you still do not pay what you owe in full or on time, the IRS or state agency will file a public document called a “Notice of Federal/State Tax Lien.” This will alert creditors that the government has imposed a lien on your property.

To avoid a tax lien, you must file and pay your taxes in full and on time. If you cannot pay your taxes in full or know that you are not going to make the deadline, contact the IRS and work with them.

Rather than ignoring letters from the IRS like many people disastrously do, it is highly beneficial for you to work with the IRS to create a payment plan to ensure that you eventually settle your tax debt. The IRS is very willing to work with people who cooperate and show responsibility for their taxes.

What effect would a tax lien have on me?

A lien can affect your life in four main ways:

• First, a lien will attach to all of your assets. This means your property, your vehicles, your home, your securities and even your savings can be confiscated by the government. Any additional assets you acquire during your lien can also be confiscated.
• Second, once the IRS has issued a “Notice of a Tax Lien,” you may find it very difficult to open any line of credit.
• Third, your business and all of your business property or business accounts can also be confiscated.
• Fourth, your tax lien and the “Notice of a Tax Lien” can continue on with you even after you have filed for bankruptcy.

Obviously, the best way to get rid of your lien is to pay the money that you owe the government. Once you have paid back all your tax debt, the IRS will have to release your lien within 30 days.

In some cases, there are options for minimizing the effect of your lien, such as discharge of property, subordination, or even withdrawal of the lien.

The most important tool to get rid of a Notice of Federal Tax Lien is an Offer in Compromise. Acceptance of an Offer in Compromise removes all federal tax liens. Talk with a tax professional at Tax Crisis Institute today, and we can help you mitigate the negative effects of your tax lien and get rid of it quicker!