Tax Liens

A federal tax lien gives the government a legal claim to your property because of unpaid taxes.  Having a lien put in place against your property can do considerable damage to your credit rating, making it difficult or impossible to get a loan for large purchases.  It can also affect your ability to be accepted for a lease or a credit card, and since some employers check credit ratings before they hire new employees, it can even affect your ability to get a job.

Steps Toward a Federal Tax Lien

If you owe federal taxes, a lien can be placed against your property after payment is demanded and full explanation of the amount owed is given to you, and you don't pay the amount in full after 10 days have passed.

The lien will be in the amount of the tax debt, and your creditors are notified that the government now has a claim against your property. This includes any property to purchase after the lien is filed, as well, so any property you own or acquire while the lien is in place can technically be seized and sold to pay the lien. The lien is filed officially through the court so that payment of the debt becomes a priority should any property be sold or bankruptcy be declared. In the case of bankruptcy or the sale of real estate, the lien would be satisfied before the property owner can collect the rest of the proceeds. The amount of the lien is public record until it's paid and released.

Release of a Federal Tax Lien

The lien will be released within 30 days under these circumstances:

• You pay the debt including any extra interest and fees or have the debt adjusted through negotiations
• You submit a bond that guarantees the debt will be paid
• And you pay all fees relating to filing the lien

The lien can be withdrawn under certain circumstances, too. If it wasn't filed properly in line with IRS procedures, for instance, or it was filed before the property owner's time ran out, it can withdrawn. If an agreement was made to pay the debt in installments once you were informed of the lien, or it's determined that withdrawing the lien will actually benefit both you and the government and allow the debt to be paid more quickly, the lien could be withdrawn. A lien filing can also be appealed within 5 days after the filing in cases of errors, late filings, a filing done during bankruptcy and under other special circumstances.

Do you have any property lien disputes? Contact a Real Estate Lawyer for successful resolution of all property liens that you may be concerned with.