Most people dream of having their own business, but some business owners don’t realize that this career choice comes with a baggage: they have to handle their federal tax payments and make sure they pay on time. If they fail to do so, the Internal Revenue Service or IRS can have a legal claim on their assets and put their place of business or residence on a tax lien.
Once properties are placed under a tax lien, business owners can eventually see these assets taken from their hands. That’s not all they could expect, too—or in this case, dread. As a tax lien is considered a public record, credit reporting agencies have no alternative but to include it in their credit reports through a tax lien search. This means that one’s pristine credit score would most likely take a hit once it’s known that a tax lien has been imposed on his or her assets.
Things can be much worse for those who already experienced a credit score that’s below appealing standards. As such, they would find difficulties in getting loans—at least until after their tax debts are fully paid.