A federal tax lien gives the IRS a legal claim to a taxpayer’s property for the amount of an unpaid tax debt. Filing a Notice of Federal Tax Lien is necessary to establish priority rights against certain other creditors. Usually the government is not the only creditor to whom the taxpayer owes money.

A lien informs the public that the U.S. government has a claim against all property, and any rights to property, of the taxpayer. This includes property owned at the time the notice of lien is filed and any acquired thereafter. A lien can affect a taxpayer’s credit rating, so it is critical to arrange the payment of taxes as quickly as possible.

Liens will now be withdrawn once full payment of taxes is made if the taxpayer requests it.

There are many other cases where liens may be withdrawn.  Please contact us for an appointment to discuss your particular situation.

How to Get Rid of a Lien

Paying your tax debt – in full – is the best way to get rid of a federal tax lien. The IRS releases your lien within 30 days after you have paid your tax debt.

When conditions are in the best interest of both the government and the taxpayer, other options for reducing the impact of a lien exist.

Withdrawal

A “withdrawal” removes the public Notice of Federal Tax Lien and assures that the IRS is not competing with other creditors for your property; however, you are still liable for the amount due.

What’s the Difference Between a Levy and a Lien?

A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a legal claim against your property to secure payment of your tax debt, while a levy actually takes the property to satisfy the tax debt.

How a Lien Affects You

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

Avoid a Lien

You can avoid a federal tax lien by simply filing and paying all your taxes in full and on time. If you can’t file or pay on time, don’t ignore the letters or correspondence you get from the IRS. If you can’t pay the full amount you owe, payment options are available to help you settle your tax debt over time.

Wage Garnishment

If the IRS levies (seizes) your wages, part of your wages will be sent to the IRS each pay period until:

• You make other arrangements to pay your overdue taxes,
• The amount of overdue taxes you owe is paid, or
• The levy is released.

Part of your wages may be exempt from the levy and the exempt amount will be paid to you. The exempt amount is based on the standard deduction and the number of personal exemptions you are allowed.