Federal Tax Lien
by admin on 25/05/10 at 7:45 am
Federal Tax Lien
If you owe the IRS money, there are a couple ways they can get what they want out of you. This can be from wage garnishment, levies or a federal tax lien. A federal tax lien is a legal claim on your property, which is then used as security or payment for a debt owed. When your property is used as security, you are still able to retrieve your assets by paying off the debt. If you don’t then the IRS will keep your property and auction it off. A notice of federal tax lien is first sent to you regarding the bill owed. This is sent after the IRS assessed the liability. Next, you have the option of either making an agreement with the IRS or paying off the debt in full. If you refuse to deal with the matter, IRS tax liens will be filed against you.
After You Receive Notice of a Federal Tax Lien
If you’ve received a notice of a federal tax lien, you should seek legal help immediately. With an tax attorney, you can have the advice and assistance you need to take the right actions to avoid the tax lien being placed on your assets. Once the IRS tax lien is filed, all of your creditors are notified – the tax liens are placed on all of your property and will stay until you pay back the debt. If you don’t all of your property will be seized. If you decide to file bankruptcy, the notice for federal tax lien can be used to prove your case. If you own a business, the lien will also be placed on your accounts receivable. New assets you purchase can and will also be seized by the federal tax lien.
If you plan to give up ownership of property, like a car or your house, you can apply for a Certificate of Discharge to remove the lien on that property.
How a Federal Tax Lien Effects Your Credit
Your credit score is also affected by IRS tax liens. This will keep you from being able to take out a new loan, apply for credit cards or even sign a lease. Tax liens are very serious business, so it should be taken care of immediately.
Releasing a Federal Tax Lien
With legal help, this process will be made much easier. If you decided to pay off the debt in full or through payments, the IRS tax lien will be released within a month of full payment being made. It can also be released with an accepted bond made by you, with a promise to pay the rest of the debt. You will be held liable for fees for state or other jurisdiction charges related to the filing of a release of a tax lien. If the lien isn’t released in the time stated, you can sue the federal government for damages (not the IRS).
After the amount of your debt is paid off, it will no longer be on your public record.
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