Taxpayers with income tax debt may find notices being sent to them from the IRS. These can include statements of misfiled information, penalties, debt and notices of federal tax liens. If an individual is no longer compliant, the IRS will send a notice of federal tax lien and levy on a taxpayer’s assets. To protect your finances, your assets and your standing with the IRS and credit ratings, call a tax professional as soon as a federal tax lien notice is received.
Income tax debt can become more complex with the introduction of federal tax lien problems. A tax lien is a legal claim that places a hold on a taxpayer’s assets and accounts if they are behind on payments and have accrued debt. This hold guarantees that the government will be reimbursed for the unpaid taxes if an individual fails to make payments. This lien also grants the IRS the right to seize property after the federal tax lien notices have been sent and no action has been taken.
Problems with federal tax liens should be solved as quickly as possible if they cannot be prevented. Tax liens damage a taxpayer’s credit rating and stay on their credit report for seven years. A lien can be satisfied or withdrawn by the IRS. To satisfy a federal tax lien, a taxpayer must repay the full balance. If it is paid in cash or a cash equivalent, the IRS will immediately release the lien. If the debt is paid by other methods, such as an installment agreement, the lien will be lifted 30 days after the full payment.
Lien withdrawal occurs from one of three scenarios. The first case of lien withdrawal happens when the lien is not filed in accordance with IRS regulations. The IRS will also withdraw the lien if it would speed up the collection process. Similarly, if the IRS decides that it is in the best interest of themselves and the taxpayer, they can withdraw the lien. If none of these occur, but a taxpayer feels the lien has been wrongly placed, it can be appealed.
While a federal tax lien problem is serious, the IRS can take steps beyond the lien to collect on a balance owed. If you have been issued a lien and you act quickly enough, it is possible to have the filing of the lien prevented. If not, it can still be released. Don’t let a lien sit and keep you from your accounts and assets or allow a levy to be filed. Call a tax professional today for a free consultation and get your problem with federal tax lien removed.