IRS Federal Tax Lien: Why It Matters & What You Should Do!

IRS Federal Tax Lien Information

irs federal tax lien problemsFor some, the "Notice of a Federal Tax Lien" conjures up images of the IRS taking all their possessions. For others, it is just another letter from the IRS and nothing to worry about. These are both misconceptions. An IRS Federal tax lien is an easy way for the IRS to secure a debt and can greatly affect your life. This page will explain what a lien is and how to protect yourself against one.

How Does an IRS Federal Tax Lien Work?

After your tax debt has been assessed, the IRS will send a "Notice and Demand for Payment" to the last known address on file. If you do pay your tax debt in full within 10 days after the notification is sent, an IRS Federal tax lien will be filed in your county's court system. It is basically a knee-jerk reaction to tax debts the IRS feels are large enough to secure.

Unfortunately, an IRS Federal tax lien has the power to completely ruin your credit. On top of that, it is terrible news for your career plans. If you work for the government, you could lose your security clearances and possibly your position. If you are interviewing, you are more likely to get turned down due to the tax lien on your credit score.

How Do You Prevent an IRS Federal Tax Lien?

There are only two ways to prevent an IRS Federal Tax Lien. You must either pay your entire tax debt in full or enter into a Streamlined Installment Agreement. The payments are calculated by dividing your tax debt by 60 payments or the number of months left before your tax debt expires, whichever is sooner. You will not have to disclose your finances, because the payments are not based off how much you can afford. You must meet the following conditions to enter into and satisfy a Streamlined Installment Agreement.

  • Owe $25,000 or less, or be able to pay down to that amount.
  • Make at least your minimum monthly payment on time every month.
  • Have all of your previous tax returns filed, and continue to file on time every year.
  • Pay any future taxes in full before the filing deadline.

There are other types of Installment Agreements with different requirements and benefits. However, this is the only one that can prevent an IRS Federal tax lien from being filed.

How Do You Remove an IRS Federal Tax Lien?

The most effective way to remove an IRS Federal tax lien is to pay it in full. However, this isn't always possible. If you are giving up ownership of property, you can apply for a Discharge of a Federal Tax Lien. If you wish to withdraw a Federal tax lien, one of the following must apply to your situation.

  • The IRS Federal tax lien was filed against you incorrectly.
  • You entered into a Streamlined Installment Agreement.
  • You prove that withdrawing the IRS Federal tax lien will help you pay the debt faster.
  • You prove that the withdrawal is in the government's best interest, as well as your own.

You can also Appeal the Filing of an IRS Federal Tax Lien if your tax debt is paid, your debt was assessed wrongly, you are an Innocent Spouse, or you were in Bankruptcy.

To find out how to best handle IRS Federal tax lien problems, you need to speak with someone with experience in lien issues. Consult a professional. Call now or fill out the form below for a free tax debt consultation on IRS Federal tax lien solutions! We'll only connect you with a tax debt relief company holding at least a B rating with the Better Business Bureau.

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