Unpaid Taxes: What You Should Know about Tax Liens

What You Should Know about Tax Liens

A tax lien is placed by the Internal Revenue Service (IRS) when taxes have not been paid.  Basically, it’s a claim from the government on your property and once it is issued, it can attach to just about anything you own.

When the IRS places a tax lien because a taxpayer has unpaid taxes the action is enforced if a taxpayer neglects to appeal or work out a solution with the IRS to resolve the liability.  Once your tax liability is assessed, you receive a notice demanding payment from the IRS but fail to pay toward tax debt within 10 days of being notified, the IRS files a lien. Even if you receive notice of a lien being filed, you still have an opportunity to stop the process but working out an agreement with the IRS.  There are installment plans available or if you qualify an offer in compromise may help resolve tax debt .

The lien covers taxes owed, including penalty fees and accumulating interest.  Items subject to a lien include rental income, a vehicle, a house and securities.  Any personal property with value is subject to a lien. When you sell you property the IRS is entitled to profit; taking it and applying it to the outstanding taxes.  A lien stays in place until the tax liability is satisfied. A tax lien may have serious effects on your credit rating so many taxpayers look to avoid the action. Questions and concerns can be discussed with a tax attorney or tax expert.

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