For those who have a large amount of tax debt, a lien may be brought against them by the IRS. A lien gives the IRS authority to seize your property. Many individuals may find themselves with a large tax debt, and some may think that a lien may be the end of their credit and result in a loss of property. Although a lien is never a pleasant situation, there are things that can be done in order to work through the process.
A lien is issue only after a few conditions are met. First, the IRS must assess the liability. They must show the amount of money owed and weather the amount is enough to seize property. Next, they must send a written warning to the individual demanding payment. If the payment isn’t received within ten days, the IRS will be able to initiate a lien on the person’s property. A lien will harm the credit of the individual and will affect the selling of the person’s property. When sold, the amount of the lien will need to be paid before the transaction is complete.
Ways to Deal With Liens
Even after a lien has been issued, it can still be paid off within 30 days without penalty. If the amount owed including penalties and other additions are paid in full, the lien must be lifted. If the government fails to lift the lien either knowingly or unknowingly, the individual may sue the federal government.
A lien is only valid for 10 years and then it will expire. Waiting it out might be one way to go about dealing with it, but a lien can be reissued if the IRS so chooses so waiting it out is not what we’d recommend.
You can request a certificate of discharge if the lien is set on a certain property. For example, if the lien is put on one’s main residence, they may be able to apply for a taxpayer relocation adjustment for the amount of the lien. Depending on the situation, hiring a professional will help you resolve the issue faster and more satisfactorily than trying to do it yourself.
In some cases, the IRS will withdraw the lien, but only if certain specifications are met. These include (1) The lien was issued too soon or didn’t fit IRS procedures, (2) A payment agreement was set up when the lien was issued. (3) It is in the best interest of the IRS to withdraw the lien as it will speed up collecting the debt (4) Withdrawing the lien would be in the best interest of the individual as well as the government.
The lien can also be withdrawn in other circumstances including a failure by the IRS to follow appropriate procedures. If issued with a lien, it is best to consult us as we can help determine the best course of action.
Depending on the situation,we will provide you with the best course of action for dealing with the lien or we will find a way to have it lifted altogether.
Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.
There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.