A federal tax lien is the government’s legal claim against your property when you have a tax debt. When the IRS liens your property, it files a public document to alert creditors that the government has a legal right to your property.
Once a federal tax lien is place on your property, it affects your ability to sell or otherwise negotiate that property without the IRS’ input. For example, any proceeds from the sale of real estate would be subject to a claim by the IRS to the extent of the lien amount. Even if you were attempting to refinance your home, and were not even trying to get any cash out of the transaction, a tax lien could prevent this from happening.
Another downside of a federal tax lien is that it can have a negative effect on your credit score. Since the tax lien evidences a debt that the taxpayer has failed to pay, it signals a possible payer issue. Also, the tax lien evidences a debt that can exist, depending on the expiration date, for up to ten years, with an agency that very often is aggressive in collecting on that debt.
Given the problems that a tax lien can create, it is important to get that lien removed whenever you can. There are a few ways this can be accomplished. First, if the lien was filed prematurely, or if it was applied incorrectly or not in compliance with IRS procedures, you are entitled to withdrawal of the lien.
Obviously, if you pay the tax debt in full, then the lien is released. However, this does not automatically mean that the notice of lien gets withdrawn. The only way to ensure that the lien gets withdrawn is to file an Application of Withdrawal of the Notice of Federal Tax Lien.
If you are in the process of repaying your tax debt, you do not necessarily have to wait until the debt is paid in full to get the lien removed. If you are in a monthly installment agreement for the full amount of your tax debt, the debt is $25,000.00 or less, you are in compliance with all of your tax filings and payments, you have no prior defaults on any agreements, and you have made 3 or more consecutive debit payments, then you are eligible to file the Application of Withdrawal of the Notice of Federal Tax Lien.
Victory Tax Solutions is ready to help you with your federal tax lien issue. Contact us today to discuss how we can put our experienced and knowledgeable staff to work on your case, and set you on the path to Victory!
Please feel free to call us at any time. Our toll free number is 877-772-0123.
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