There are many different types of taxes that you may be liable to pay

Depending on the situation you’re in, a tax lien will affect you differently. Tax liens show up as public records on your tax report, and that could harm your credit score. This is mainly because the reason for the lien is the problem, not the balance. Once the lien is filed you won’t be able to get a new credit card, a loan for a vehicle or car, or even sign a lease.

Tax Liens are also difficult to remove and have the potential to stay on your credit history indefinitely as the “seven year rule” does not apply to them as they do most negative credit items. There are many ways to remove a tax lien such as:

Reaching a settlement with the IRS
Paying off the lien in full
Requesting a withdrawal where you pay your lien in full or enter a payment program that will pay it off in full.

Luckily, there are many different ways in which you can release a tax lien. Until you get back into compliance with the IRS, the effects of the lien will remain intact. A certificate of release of lien from the IRS will be needed in order to release a tax lien.

One method is if, the taxes owed are paid in full. Once the IRS receives the full amount for the taxes along with interest and penalties they will release the lien. You can also setup a direct debit installment agreement. This plan, in particular, is for taxpayers who cannot pay off their taxes in full. The tax lien can be withdrawn as long as you have less than $25,000 in tax debt. There is also the chance that the statute of limitations will expire with a non-enforceable lien. IRS debts have a statute of limitations that usually expires after a 10-year period.

The IRS has a number of routes that it may take in order to try and recover money that is owed by taxpayers. If you are a taxpayer and you fail to make your tax payment, the tax office can put into place a federal tax lien, which is a legal claim against some or all of your property. This includes property such as your real estate, vehicles, personal belongings and any other financial assets you may have. Federal tax liens can be applied for monies owed on income tax, estate tax or gift tax amongst others.

Before opting for a tax lien, the IRS will assess your liability and then send you a Notice and Demand for Payment, which will explain what you owe in terms of taxes. If you then either refuse or for some other reason fail to make the payment, the IRS may consider opting for a tax lien. This is done by filing a Notice of Federal Tax Lien, which indicates to creditors that the government has legal entitlement to your assets.

A tax lien not only affects the financial assets and personal belongings that you own or have an interest in at the time of issue but can also affect any assets you acquire in the future as long as the tax lien is still in place. It is also worth noting that the tax lien may stay in place even if you file for bankruptcy. There are various options that could result in the withdrawal of the tax lien, which means that the government would no longer be holding rights on your assets. However, you would still have to pay your tax liability if this is done.

A tax lien is the first step the Internal Revenue Service takes to recover back taxes. Once the IRS enforces a tax levy, it can freeze your bank accounts, seize personal property and assets, as well as garnish wages.

Consequently, you want to take every precaution possible to have a tax lien removed before the IRS acts. Thankfully, there are several ways to remove a state lien. First, states place limitations on how long a lien is valid. The rules vary widely by state, which makes speaking to a tax professional your first step in avoiding harsh wage garnishments and property seizures.

Secondly, you can enter private negotiations with the IRS or state government. You can discuss the possibility of settling unpaid taxes, for example. A tax professional can help you negotiate through arbitration, mediation, or informal discussions.

Taxpayers also have the legal right to file a court order. You may also consider lien stripping (available in chapter 13 bankruptcy) or lien avoidance (chapter 7 bankruptcy). After analyzing your circumstances, a tax professional may also recommend trying to enter a property lien removal process.

Liens give the state government a significant amount of power over your finances and assets. Unfortunately, things rarely turn out well for delinquent taxpayers once a tax lien is placed. Liens offer security for creditors by allowing the government (or another creditor) to seize property or take other legal action to satisfy debts and obligations. Further, liens are public record, which means they can destroy your credit score and make it very difficult to obtain new loans.

As a result, you should consider the most viable options for removing a state lien. The first, and most obvious way, is to pay off the debt in full. However, most taxpayers reach this predicament for a reason and simply don’t have the necessary funds. Consequently, settling with the state government is a viable option, but it is only recommended if you have qualified legal representation.

You also have the right to appeal a tax lien if you believe the claim is not legitimate. There are cases in which tax liens get released or forgotten but still stay on your property, for example. Disputing a claim by filing an appeal is a legal right you have as a taxpayer, but only under specific parameters.