Releasing and Understanding Your Tax Lien

If you fail to pay owed taxes, the government can place a tax lien against your property.  The lien ensures the government they will get first right to your property over any other creditor(s). The lien doesn’t always mean the government will seize your property, but they do have vast powers and will seize your property to satisfy a tax debt. They can also garnish your wages. 

 

A tax lien is a serious matter affecting your personal or business finances. It can interfere and wreck havoc on selling your home. The tax lien is attached to your property making a transfer of clear title impossible without satisfying the lien.

 

The tax lien will remain on the taxpayer’s property until the tax liability is paid in full, the statute of limitations on the debt expires, or if the taxpayer meets the new Internal Revenue Service (IRS) Fresh Start Initiative requirements. The lien is also a matter of public record.  

 

Once the IRS files a tax lien, the lien will appear on the taxpayer’s credit report. Obtaining any kind of a loan or credit will be difficult. Even applying for a place to rent or applying for a credit card can be a huge challenge.  The taxpayer’s credit report will take an immediate hit lowering the credit score significantly. Creditors are very much aware the existence of a tax lien means the IRS will have first priority on all assets the taxpayer may have, no matter when the lien was filed. Creditors do not want to be last on the list to collect.

 

If the tax lien is released, county records will be updated to show the IRS no longer has legal claim to the taxpayer’s property. Releasing the tax lien doesn’t necessarily mean the lien will be removed from the credit report. The lien can stay on a taxpayer’s credit report for up to ten years.

 

Each state has rules as to when and how a tax lien can be released. There are also procedures and policies to get a lien released including installment plans and other alternative methods of repayment. A lien may be released if the IRS didn’t follow the correct procedures or if the taxpayer can prove the correct procedures weren’t followed by the IRS. A lien can also be released according to statute of limitation expirations. In general, the statute of limitations is ten years, but is subject to numerous exceptions.

 

Our qualified and experienced tax attorneys are powerful negotiators and have effective methods for discharging a tax lien or having a tax lien withdrawn. They handle the most complex tax matters including audit defense, assessments and appeals. Our legal team offers comprehensive tax advice, solutions and legal representation to clients facing the toughest tax matters. If you are facing a tax lien, have unpaid back taxes or other tax disputes or issues, our firm has the necessary knowledge and skills to handle your matter quickly and effectively.