What is a Tax Lien?
What is a tax lien and how do I fix it?” are questions that, hopefully, you’ve never had to ask. Chances are, though, you’ll only find out about tax liens when there’s already a problem. A federal tax lien is the government’s claim against any property that you own or that you come into possession of while you have an outstanding debt. This secures their interest in what you own, should you fail to resolve the liability in question.
The Severity of an IRS Lien
When you discover that you have an IRS tax lien, you should take it seriously. Federal Tax Liens can damage your credit and make it difficult to obtain new lines of credit. Because a Notice of Federal Tax Lien is a matter of public record, your creditors and anyone you know can learn about your problems with the IRS. Beyond the practical problem a lien creates with your credit, there is the unwanted potential for public embarrassment.
Though a powerful IRS tool, the actual tax lien definition often gets confused with a separate collection action: the tax levy, a garnishment of wages or of bank account funds. In fact, many people who do an internet search for “what is a federal tax lien” are surprised to learn that a lien does not involve asset seizure or wage garnishment. Once you understand this distinction and the impact of a tax lien on credit report metrics, you’ll likely want to get rid of your lien as quickly as possible.
IRS Lien Release Myths
When it comes to IRS liens, there are many misconceptions about what can and cannot be done. Although you have the ability to address the tax issue which caused the lien, there is seldom a fast and easy method of removal. When you’re dealing with a federal tax lien, “statute of limitation” is a popular, associated phrase you will want to concern yourself with.
The IRS has ten years from the date of assessment to collect on your tax debt. And you won’t necessarily see an “intent to lien letter” (however, if you’re aware of an existing tax debt, you must consider this as a possibility). To further complicate matters, your lien may not actually be put in place by the federal government; a “California state tax lien”, for instance, can be applied separately.
Although there is no rapid method for a federal tax lien release, you can affect the underlying problem. Rather than focusing solely on requesting an “IRS release of lien”, you should make a concerted effort to address the corresponding back taxes you owe. If you handle your tax issue with a high level of urgency, a tax lien removal may cease to be a primary concern.
Tax Lien Help
In certain instances, release of federal tax lien may be possible. For example, you may have resolved your tax issue and yet a release of tax lien has not occurred. If you think you require assistance with a tax lien release, you should contact a licensed tax professional.
Regardless of whether you need an IRS lien withdrawal or help with tax relief, you should consult with a licensed tax professional. Tax Defense Network, LLC, has a team of experienced licensed tax professionals that can provide you help in resolving your tax issue. Enlisting a seasoned tax professional can ensure that a tax lien doesn’t lead to further IRS complications.