If you have recently received an IRS lien and would like to know the implications surrounding it, we’re here to help! Legal jargon and the steps to take to ensure that you’re handling the situation in the right manner can be stressful without proper research. At the very least, what you shouldn’t do if you get a notice for payment from the IRS is to ignore the situation altogether! There can be negative implications on your records and your property if you don’t work towards remedying and replying to an IRS lien notice.
Here is an IRS lien definition that can help you understand the main point surrounding the meaning. An IRS tax lien is when you neglect or fail to pay a tax debt and the government thereby issues a legal claim against your property including any financial assets, personal property and real estate that you may own.
IRS Lien or Levy
An IRS lien doesn’t mean that the government immediately seizes your property, it just protects and secures their interest on it. With a levy however, the government can seize and sale any type of personal property to settle the debt.
Please keep in mind, if you don’t answer the IRS to pay or at least make arrangements to pay or work towards appealing your tax debt in regards to responding to your lien notice, than they reserve the right to issue a levy.
What happens when the IRS files a lien?
Before a lien is officially created, the IRS first assesses your liability and puts your balance due in the books. You will then receive a pre IRS lien notice in the form of a bill titled Notice and Demand for Payment. After these two steps, if your tax debt has not been paid in full after 10 days than a lien is filed. If you neglect or refuse to pay the debt on time than the IRS files a public document called a Notice of Federal Tax Lien to alert creditors of the government’s legal right to your property.
How do I get rid of an IRS tax lien?
It is recommended that you respond to the bill notice either by contacting the IRS yourself through the necessary measures described on your Notice or immediately seek out legal assistance to act as the intermediary in the situation so they can conduct and offer you proper Lien solutions.
If you disagree with the IRS’s determination, you have a right to a hearing and you may *respond within the time limit of the Notice with a request for an IRS Lien Appeal.
*It is recommended by the IRS government site not to send the request to the Office of Appeals as this may delay the process but to send it to the address provided in your letter explaining your Appeals rights.
Depending on your tax history and payment status you may be eligible for Discharge of Property, Subordination or Withdrawal.
Ultimately, the best way to remove a lien is to pay the amount in full whereby the tax lien will be released after 30 days. Within the 30 days it is the IRS’s responsibility to grant you a Certificate of Lien Release as well as releasing the title encumbrance from your home. If the IRS has not given you this Certificate within the 30 after you’ve paid off your tax debt than you have the right to file a lawsuit against the IRS (but not against any specific IRS employees.)
How long does an IRS lien stay on your property?
Once the IRS has a tax lien in place, it can stay on your property for a total of 10 years.
Do IRS liens expire?
Tax liens can be extended beyond 10 years with variable amounts of time either voluntarily by you or through legal operations. There are several scenarios where extensions can take place from submitting and negotiating an Offer in Compromise, filing an IRS Form 900, having a Collection Due Process appeals hearing or even filing for bankruptcy.
How do I avoid an IRS lien?
The best way to avoid an IRS lien is to file and pay your taxes on time. Remember, if you are unable to pay, reach out to the IRS in order to make payments over time with the several payment options they have available.
As long as you are actively responding and sending in the required information asked upon you, you can only help your situation. By no means should you ignore the letters your receive altogether. Remember, if you fail to respond to make arrangements or pay once a tax lien has been filed, you may eventually risk having your property seized if the IRS decides to issue a levy!
If you have recently received an IRS tax lien and require legal assistance in the Fort Worth, TX area, contact Don R. Walker, C.P.A. at 817-905-1040!