Irs Tax Liens - Tax Lien

IRS Tax Lien Basics

IRS Tax Liens are issued by The Internal Revenue Service, which is a division of the United States Department of the Treasury. Their job is to collect federal tax revenue from business and individuals living and working in the United States. In the event an individual fails to pay their annual tax bill, the IRS has the legal right to put a lien on all of the personal property and real estate holdings they own both at the time of the filing, and that which they will acquire after the lien filing, until the tax debt is paid in full and the lien released.

Owing the IRS money is serious business that can result in the loss of personal property and real estate owned by the delinquent taxpayer. Federal tax liens give the United States government claim to your property as a way to recoup the government's tax loss. A notice of federal tax lien may be filed if:

• the IRS assesses liability
• a demand for payment is sent and ignored
• payment is not received within 10 days of the Notice for Demand of Payment being received

Once the government fulfils its initial requirement to notify the delinquent taxpayer about their debt, and payment is nit received, the IRS can legally place a lien on all property for the amount of the tax debt (including interest and penalties). Once a federal lien is filed, all other creditors will be notified, since federal liens take precedence over all others under most circumstances.

If a taxpayer disagrees with the IRS filing, they do have the right to appeal the decision through the Collection Due Process at a special hearing in the IRS Office of Appeals. During the hearing the taxpayer will be asked to prove the following in order to have the lien absolved:

• that all taxes were paid prior to the lien filing
• that the tax lien was filed while the taxpayer was in bankruptcy proceedings
• that a procedural error has been made regarding the tax amount owed
• the taxpayer was not given an opportunity to dispute the assessed liability
• the taxpayer wishes to discuss collection options
• the taxpayer wishes to make spousal defenses

Once the taxpayer has had the chance to dispute the lien at the hearing, the IRS Office of Appeals will determine whether or not the lien filing was valid or not. In the event the taxpayer disagrees with the Appeals Office decision, they have 30 days to appeal once again and receive a judicial review in the court of proper jurisdiction.

Under some circumstances the IRS can withdraw lien if:

• the notice was filed too soon, or not according to legal IRS procedures
• the taxpayer has entered into an agreement of payment
• withdraw would speed collecting the tax (by allowing the taxpayer, for instance, to mortgage the property to obtain the needed funds)
• withdrawing the lien would be in the best interest of the taxpayer and/or the government

Once a federal IRS lien has been paid in full or withdrawn, it is important for the taxpayer to file a formal Request for Release of Federal Tax Lien form, otherwise the lien may not be released for up t 10 years. It is not the government's responsibility to automatically release a tax lien unless requested in writing to do so.

For more information on the Federal IRS Tax Lien process call 1-800-913-6050.

State Tax Liens