Don’t Get Panic if You Receive a Federal Tax Lien

by Dori Tery on December 19, 2012

A federal tax lien could be claimed as “A federally is given special authorization lien against any and all monetary investments or any assets of a taxpayer who fail to paid his taxes. In order to secure a tax payment, the lien enables the Internal Revenue Service (IRS) to secure or otherwise requisition the individual’s assets. Federal tax liens could be measured for unpaid taxes of any type of incomes, including pay checks, self-employment, estate, stock gains or gift taxes”. What this means to us as a tax payer is that once a lien has been issued against an individual the government has the right to claim his property, which can include personal real estate and any financial accounts including accounts receivable from any income, investments gains and retirement accounts.

What Are the Procedures toward a Federal Tax Lien?

In order for a federal tax lien to be issued for a corporation or any of us, the IRS must review and follow a few procedures to understand if an individual deserves a lien. These procedures are: reviewing the tax liability, giving a notice of a bill and request for tax balance payment. Should you ignore to pay the bill; the federal tax lien will then be processed to against you. Once the tax lien is made or even before it is, it is crucial that you made a contact to licensed tax advisor to aid you review the potential effect of receiving a federal tax lien made against you, especially to your future credit rating, ability to borrow loans and your employment prospects in government and private fields.

There are many possibilities to get rid of from a federal tax lien. Once a lien has been made against you, it is crucial to that you fully make the payment of the debt as soon as possible, if you able to meet this, the lien will be released within 30 days by the IRS. Don’t worry if you cannot pay off your tax debt in full after receiving your first federal tax lien, as there are several solutions which you or your licensed tax advisors can think through. The first decision is to appeal a certificate of discharge of your individual property. This strategy gives you an opportunity to sell the property free of the lien, and in turn you can pay off some or all of the debt that you may have. The second decision is to file for subordination, which necessary gives you the chance to transfer other creditors ahead of the IRS in the hopes that you can secure a loan to aid pay off some or all the federal tax lien that has been made. The third decision that is offered to an individual or business that has a tax lien is applying for a withdrawal. What this does is it gets rid the lien fully from you and guarantees that the IRS is not opposing with other creditors for your property. You can consider to appeal if you think the lien was filed incorrectly.

How Does a Tax Lien Affect Me?

As mentioned above, the federal tax lien assigns to all of your personal and real estates, including financial assets. The lien will damage your credit score and may stop you from getting bank loans or even damage your employment prospects. Also, filing for bankruptcy will not solve the tax lien problems.

federal tax lienIt is crucial to understand that should an individual ever discovery themselves in the difficulty of a federal tax lien that they ask help from a licensed tax advisor and make an appointment and consultation as early as possible to discuss the potential solution that could help reducing the damage. The tax advisor should able to help you review the solutions available to you and help you to remove the federal tax lien as soon as possible.

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