How To Remove Federal Tax Lien? - 2013-10-27
A federal tax lien is a legal claim that the government makes toward your property if you ignore or decline paying off a tax debt. The lien will protect the interest the government has in your property, which includes your financial assets, the property you own, and real estate. A federal tax lien will have an effect after the IRS has carried out the following:
• Assesses the liability you have;
• Mails you something that tells you how much money is owed;
• You refuse or neglect to totally pay the amount by the scheduled due date.
The IRS will file a document in the public record, and it will make creditors aware that the government has the first claim on your property.
How do you Remove a Lien?
You need to pay your full tax debt to remove a federal tax lien – and that is clearly the optimal option to do it. That is what the IRS wants as well. The IRS will let go of your lien within approximately a month once you have finished payment of the tax debt you have.
Choices: When the situation is such that it could be the best thing to do for both the taxpayer and the government, other choices exist for lessening the effect of a federal tax lien.
Property discharge: This lets you sell property without the lien having an effect.
Subordination: This doesn’t take away the lien, but it lets other creditors move past the IRS, which could make it simpler to get a mortgage or loan.
Withdrawal: This will remove the notice from the public eye and ensure that IRS won’t be competing with additional creditors for what you own.
How Does a Federal Tax Lien Affect you?
A lien will attach to every one of the assets you have (like your vehicles, securities, and real property), and it will tie to all future assets throughout the lien’s duration.
If the IRS puts through a Federal Tax Lien notice, it may cut down on your potential to receive credit.
The lien will attach on to all of your property related to your business and on all the rights that are related to your business property, like the accounts receivable.
If you move forward on a bankruptcy filing, your federal tax lien, lien, and tax debt may survive the bankruptcy and continue on.
Stop a Lien from Happening
You can prevent a federal tax lien from happening by sending in your tax returns on time and paying your taxes for the full amount at the right time. If you can’t pay or file on time, you should not just disregard the correspondence or letters you receive from them. If you are unable to pay the total amount you have to pay, there are a number of payment choices you have to help you deal with the tax debt you have over a period of time.
A federal tax lien isn’t the end of the world, but it can prevent you from enjoying yourself if you have it hanging over your head.