What You Need to Know About IRS Tax Liens
An IRS tax lien is a legal claim the Internal Revenue Service (IRS) files against your property to secure the payment of taxes you owe. The lien arises from a federal tax assessment against you and gives the IRS a priority interest in all your current and future assets, including real estate.
The lien attaches to all of your property, including your home, car, and bank account. The IRS can enforce the lien by seizing and selling your property to pay your tax debt. A tax lien also affects your credit report and may make it difficult for you to get a loan or borrow money.
If you pay the taxes owed, the IRS will release the lien. You need to contact an IRS specialist immediately if you are having difficulty paying your taxes so that they can work with you to resolve the problem.
What Are The Consequences Of An IRS Tax Lien?
- It Affects Your Ability to Sell Your Property: If the IRS files a tax lien against you, it will affect your ability to sell your property. The lien will show up on any title search and will make it difficult (if not impossible) to sell the property until the lien is paid off. If the buyer does enter into a purchase agreement with you, the lien may also lower the value of the property, as the buyer may be worried about the IRS seizing the property to satisfy the lien if you still do not settle with the IRS.
- It Limits the Effectiveness of Bankruptcy Relief: When an individual files for bankruptcy, one of the goals is to have as much of their debt discharged as possible. However, an IRS tax lien can limit the effectiveness of bankruptcy relief. This is because the bankruptcy court will not discharge any of the individual’s debt that is owed to the IRS. The lien will attach to all of the individual’s assets and make them liable for the full amount of the debt. The court, however, may allow you to pay the debts over an agreed-upon period of time.
- It Hurts Your Ability to Borrow Money: When the IRS files a tax lien against you, it creates a public record of your debt. This can make it difficult to borrow money because potential lenders will see the lien as a sign that you are not creditworthy. The lien may also lower your credit score, making it harder to get approved for loans and other forms of credit.
- Through Prospective Employer Credit Checks, it Can Even Harm Your Chances of Getting a New Job: When you’re looking for a new job, the last thing you want is a cloud of negative information hanging over your head. Unfortunately, that’s exactly what can happen if you have an IRS tax lien. Researchers have shown that employers are increasingly using credit checks as part of their hiring process. The study also found that having a tax lien can hurt your chances of getting a new job. Employers often see tax liens as a sign that you’re not responsible or reliable and may be less likely to offer you the position – or even call you back for an interview. In some cases, they may even rescind a job offer that’s already been made.
- The Lien Will Remain on Your Credit Report: The lien will remain on your credit report and will stay in place until the taxes are paid in full, or the IRS agrees to release it. This can take years depending on the amount of taxes you owe.
How Can You Avoid an IRS Tax Lien?
As you can see, an IRS tax lien can be a very serious problem. Fortunately, if you are not yet owing any back taxes, there are ways to avoid an IRS tax lien.
The most important step is to file your taxes on time and pay the full amount you owe. If you cannot afford to pay the full amount, you should contact a tax attorney in Illinois to contact the IRS and try to arrange a payment plan.
Another important step is to keep accurate records of all your income and expenses. This will make it easier to file your taxes on time and pay the correct amount.
You should also avoid any behavior that may attract the attention of the IRS. This includes claiming excessive deductions, or transferring money or assets to family members or friends in order to avoid paying taxes on those assets. Another reason the IRS may become interested in a taxpayer is if they have been making large purchases or transfers of assets, especially if these transactions occurred close in time to one another.
The IRS may also be interested in a taxpayer’s activities if the taxpayer appears to be engaged in other patterns of behavior that suggest tax evasion. For example, the IRS may investigate a taxpayer who reports little or no income on their tax return, yet has a lavish lifestyle that cannot be supported by their reported income.
What Should You Do if You Receive a Notice of an IRS Tax Lien?
If you receive a notice of an IRS tax lien, there are a few things you should do:
- Review the notice carefully to make sure the information is correct.
- Contact the IRS if there are any errors on the notice.
- If you owe money, try to work out a payment plan with the IRS.
- If you cannot afford to pay your taxes, explore your options for getting help from the IRS.
- Keep copies of all notices and communication with the IRS.
- Take action to clear up the tax lien as soon as possible.
- Get professional help from a tax attorney.
- Do not ignore the problem – take action now!
How an IRS Tax Lien Removal Attorneys Can Help You
An IRS tax lien removal attorney can help you get your financial life back on track. As we have shown you, if you have an IRS tax lien against you, it can be very difficult to get a loan, or sign a lease agreement, among other things. An attorney can help you negotiate with the IRS to get the lien released. They may be able to get the lien reduced or even removed altogether.
IRS Tax Lien Removal Attorneys In Illinois
If you have an IRS tax lien placed against you, it can be a very difficult situation to resolve on your own. If you are facing an IRS tax lien, and you live in Illinois, you need to contact a qualified tax attorney at North Suburban Legal Services, LLC for assistance. Our attorneys are skilled in the three ways to deal with an IRS tax lien: paying the debt in full, negotiating a payment plan, or disputing the lien.