The IRS imposes tax liens because they have a high rate of effectiveness. As long as liens are being filed, taxpayers will have few alternatives except pay their tax debt.

Ruined Credit

Once a lien is filed, your credit rating will be damaged and it will be nearly impossible to buy a house, buy a car, get a new credit card, or even sign a lease. Consequently, it is very important to work to resolve your tax debt before a lien is filed against you.

Tax Liens Defined

Basically, tax liens give the IRS legal claim to your property as security or payment for your tax Debt. When the IRS files notice of the tax lien, creditors are publically notified that the IRS has a legal claim against your property. This includes:

·      Property acquired after the tax lien is filed

·      Accounts receivable

·      House, car, or real estate

The IRS cannot file a "Notice of Federal Tax Lien" unless they first:

·      Assess the tax liability

·      Send a “Notice of Demand for Payment”

If you neglect or refuse to pay your tax debt within 10 days after you received notification, the IRS will create the tax lien for the amount of tax debt owed.

Releasing a Tax Lien

There are several options for releasing a tax lien. Unless you are paying your tax debt in full, it will be hard to remove the tax lien without professional help.

Options for releasing a tax lien:

• Payment in full: The lien will be removed when the tax debt is paid in full.

• Withdrawing liens: You can file to have your lien withdrawn if notice was filed too soon, you enter into an Installment Agreement with the IRS, or if withdrawing the lien will speed up collection of the tax debt.

It’s a good idea to consult a tax professional to see which option is best suited to your case with the IRS.

Statute of Limitations: The Ten-Year Rule

Usually, tax liens are automatically released ten years after the tax debt is accessed. If you feel that the IRS has negligently failed to release a lien and that the statuary period has passed, you should consider working with an attorney to have the lien removed. You can even sue the federal government for damages incurred by the lien.

Learn more about what you should do if you can’t afford to pay your taxes. You can also get a free tax consultation to resolve delinquent tax debt today!