What is an IRS Lien?

Dealing with an IRS tax issue is always a stressful time. There are a lot about taxes that the average person doesn’t know or understand, so it can be particularly daunting when you have to figure out what to do next. Trouble with the IRS can be made even worse if you are having financial problems and have been unable to pay your bills, including outstanding tax debts. Whenever you’re unable to pay your tax debts, the IRS has several courses of action that it can take. One of the most common is by imposing a tax lien on your property. But what does this mean? How will it affect you and your property? Read ahead to learn more about what an IRS lien is and what you can do about it.

What is a tax lien?

A federal tax lien is when the IRS has a claim to your property because you failed to pay a tax debt. The lien will attach to all of your property. This means that proceeds made from any property (like a house or car), sold while the lien is in place, will be paid out to the IRS first. It’s also important to note that tax liens are a matter of public record, so they will eventually show up on your credit report and can therefore impact your ability to take out a mortgage or business loan. Although the IRS has processes that will eventually remove the lien from your report, it’s a process that takes more time and effort, so it’s best to avoid it altogether.

How can you avoid a tax lien?

If you have received notices for unpaid taxes from the IRS but are unable to pay off your current debt in full, it’s important to remember that you have options. The best option is setting up an installment plan with the IRS; in layman’s terms, this is a payment plan. There are several different options depending on the amount of debt you have accrued. In some cases, this can prevent the IRS from filing a lien against you.  Speak with a tax professional to find out if this is an option for you.

How long does the lien exist?

A federal tax lien can exist for as long as 10 years, unless prior to then you either fully resolve your debt or begin cooperating with the IRS towards such a resolution. However, the good news is that the IRS will not slap you with a lien suddenly or without warning. The IRS will send multiple notices of overdue tax payments and options for repayment before finally sending the Notice of a Federal Tax Lien. Unfortunately, once the lien has been imposed, it can be difficult to get it removed.

What can you do?

Whenever you receive a Notice of a Federal Tax Lien, you’ll probably want to figure out the quickest way to get it lifted from your property. There are several ways you can go about this. The first is by paying your debt off in full. Once that occurs, the IRS will remove the lien within 30 days. Another way to do it is through withdrawal. In general, you can apply for withdrawal if you have paid your taxes in full, have filed all of your tax returns for the past 3 years, and are current on estimated tax payments. Sometimes, the IRS will withdraw the lien even if you have not paid the taxes in full if you have set up an installment plan and are paying your tax debts off that way.

Contact Boeshaar Law today.

At Boeshaar Law, we are qualified to help you deal with your IRS troubles. We understand that sometimes things happen, and want to work with you to get yourself out of debt and any liens on your property removed. If you have received any type of notice from the IRS about your outstanding tax debt, please don’t hesitate to contact us immediately at (206) 899-4860.

Written by Robert V. Boeshaar

Robert V. Boeshaar

Robert V. Boeshaar is a Seattle tax attorney committed to helping individuals and small businesses who are facing problems with the IRS. He believes in using his experience to serve others and to make a difference in their lives.