A tax lien is a civil action filed in court of the county where a person resides or a business operates by a government agency particularly the Internal Revenue Service. IRS is seeking a legal claim – attachment against that person’s or business’ property or money owing to taxes. In normal situation, once the claim is proved, the court will then make an order of attachment or lien against the said property or money and published on public records. But in the case of the IRS, because of its federal power and the quasi-judicial status, it need not go to court for this process and issues directly a tax lien on the tax payer’s property. This means that it announces to the world that you owe the IRS taxes for which the property is being secured. The property that maybe subject of the tax lien can either be real which is most preferred, or personal. Once there is a tax lien on record, it becomes difficult or impossible for a taxpayer to dispose of the same and it will likewise affect the taxpayer’s credit standing. For example, the taxpayer cannot sell a parcel of land or a car subject of the tax lien nor can the taxpayer secure a financing to purchase a parcel of land or a car for that matter, unless of course, you satisfy the tax lien or until final payment is made on your liabilities or in short, the tax lien is released, discharged, withdrawn or removed.
Tax Liens are effective for a period of ten years and are generally self-releasing after that period unless refiled by the IRS in which case, it shall be effective for another 10 years. The government’s tax lien on a taxpayer’s property is priority over his other creditors and thus, the government is first on the list of creditors to be satisfied in the case of attachment and liquidation.
The most common question as regards the tax lien is: whether the IRS can make a tax lien against your home. The answer is yes. However, consideration is being made in case the person wants to sell his home as there are a number of options to satisfy the tax lien thereon. If you have equity in your home, the tax lien is paid out of the sales proceeds at the time of closing. If the home is being sold for less than the tax lien amount, the taxpayer can request the IRS to discharge the tax lien in order to allow the sale or, better yet ask that the tax lien be made secondary to the lending institution’s lien to allow for a refinancing or restructuring of the mortgage.
In simple terms, just imagine that a tax lien is like a notice or a piece of paper attached to any of your property and written thereon is a sentence saying nobody should get this because the government has priority interest and will take this property to answer and made as payment for unpaid taxes of the owner. While it is as simple as it seems, there is a real need to seek professional tax advice or assistance from a tax relief expert to clear and discharge a tax lien on any property especially considering that this involves unpaid back taxes were a tax professional can really be handy to go through the resolution aspects of the tax matter.
Release your IRS tax lien and resolve your tax matters today 877-788-2937.
Mike Habib is an IRS licensed Enrolled Agent and represent taxpayers regarding tax liens in the following metro areas: Los Angeles, Pasadena, Glendale, Burbank, Orange County, Riverside, Palm Springs, San Bernardino, Palmdale, Bakersfield, New York, New Jersey, Chicago, Houston, Phoenix, Philadelphia, San Antonio, San Diego, Dallas, San Jose, Detroit, Jacksonville, Indianapolis, San Francisco, Columbus, Austin, Memphis, Fort Worth, Baltimore, Charlotte, El Paso, Boston, Seattle, Washington DC, Milwaukee, Denver, Louisville, Jefferson, Las Vegas, Reno, Hempstead, Tucson, Nashville, Davidson, Portland, Tucson, Albuquerque, Santa Fe, Anchorage, Atlanta, Long Beach, Fresno, Sacramento, Mesa, Kansas City, Cleveland, Virginia Beach, Omaha, Miami, Oakland, Tulsa, Honolulu, Minneapolis, Colorado Springs, Arlington, Wichita, Birmingham, Montgomery, Tampa