What’s a federal tax lien and how do I get rid of it?

There are many scenarios that may result in an individual accruing tax debt. In cases where an individual is notified by the IRS via a Notice and Demand for Payment of an outstanding tax bill, it’s wise to address such matters in a prompt manner. At times, an individual may refute the amount or existence of tax debt. When contacted by the IRS, individuals who fail to take action with regard to an outstanding tax bill may be subject to fines and penalties including a federal tax lien.

Individuals who receive a Notice of Federal Tax Lien are likely to have many questions and concerns about how a lien affects their financial standing and credit. An attorney who handles tax issues can assist with problems that stem from and disputes related to tax debt.

When the IRS issues a tax lien, the government is effectively notifying other creditors of its legal right to a taxpayer’s property. A lien not only attaches to all of an individual’s existing assets, but also to any future assets that are acquired or purchased while a lien is still in place. Individuals who are subject to a tax lien are likely to encounter difficulty when attempting to secure a home or car loan or other lines of credit.

For business owners a lien “attaches to all business property…including accounts receivable.” For these reasons, business owners who face an IRS lien are often concerned about the security and future of their business and very livelihood.

Individuals who are facing an IRS tax lien have options and an attorney who specializes in tax law can assist in getting rid of a tax lien. An attorney will work with an individual to assess his or her financial situation and to help determine which option is in an individual’s best interest.