Federal Tax Lien

A federal tax lien is a step that the IRS takes against an individual when the Demand for Payment notice is continually ignored. A lien is basically a claim against your personal property, which makes the person unable to buy or sell items easily. The lien can be against items such as your real estate, any personal property, and even your finances. Contact New York Tax Attorney Service in New York City, at (347) 535-4017 if you have received a notice that you have a lien against you.

What Is An IRS Tax Lien?

When the IRS places a lien against you, they file a public document that alerts creditors of your IRS status. This is why it is difficult to buy things, as well as sell them. Most creditors will take a look at that and deny you any credit. Even after you satisfy the amount you owe to the IRS, it can still show up on your credit report for up to 10 years. With the Fresh Step program available now, you can request that the IRS withdrawal your lien after you pay it in full. If they agree, after it is withdrawn, you can submit it to all 3 credit bureaus yourself.

Federal Tax Lien – Fresh Step Program

This may be an option for you if you have stayed current on the past 3 year’s tax returns (after the lien is released) and you are current on your estimated tax payments. Also, if you have begun or changed your regular installment agreement to a Direct Debit installment agreement this may allow for a withdrawal. There are stipulations of course:

• You must be a qualifying tax payer
• You must owe less than $25,000
• You must fully pay the amount in 60 months or before the collection statue expires
• You must remain in full compliance with other filing and payments
• You have no defaults on a previous or current direct debit plan
• You have made 3 consecutive payments

Other Options If You Owe Taxes

Depending on the amount you owe the IRS, you may have a few options to combat the tax lien. Normally you have 10 days to pay the amount in full before the tax lien is in place. If you have the money, obviously the best option would be to pay them off. If you don’t have the cash, the IRS may work out an installment plan with you. If neither of the options works for you, then you could try and refinance your home if you have a lot of equity, and pay the IRS off that way. If the lien is already on your credit, this may be a difficult option. Some creditors may not want to work with a person with a tax lien on their credit.

Consequences of Not Paying Your Back Taxes

If you decide not to pay back the IRS after you get a tax lien, then they will continue with their collection efforts. This can include a tax levy which allows the IRS to actually sell your possessions. They can even file charges against you and send you to jail.
 
Both of these methods are extremes, of course, but if you dodge the IRS long enough they can and will get their money, one way, or another. It is always best to try and work with the IRS upfront, rather than get to this point or something worse. You can always go to the IRS website and look at your options, also.
 
Needless to say, it never pays to ignore the IRS. If you are in the beginning stages of owing the IRS (before you have a lien against you), you can work out a payment plan or another option, which will keep you from getting a lien against your property. It may be best for you to contact a tax resolution professional to help you weigh your options. If you live in New York City then you can contact New York Tax Attorney Service at (347) 535-4017, today to assess your options.