Wednesday, January 7, 2015

What to Do When You’ve Filed for Federal Tax Lien

Getting issued a federal tax lien is one of the dire possibilities of not paying your taxes (or not doing so on time, in some cases). The IRS files this document to notify the public that you have an unpaid tax debt. It will be attached to your real and personal property, and any sales proceeds will be collected by the IRS to satisfy your debt before any amount will be paid to you. It can be linked to your properties and credit report up to ten years because of the corresponding statute of limitations.

If you receive a Notice of Federal Tax Lien, make sure you consider the following measures:

Check if it is correctly filed.

There are some instances that the lien is filed in error (e.g. if it was filed for the wrong person or if you don’t have any outstanding balance). If that happens, contact the federal agency to confirm the error. They will withdraw the federal tax lien, which means it won’t appear in your records.

Review your rights and options with a tax attorney.

On the other hand, if you really did miss paying your taxes, it would be best to review your tax history and the notices issued to you with a tax attorney. The lawyer can help you learn all the implications of the debt and the lien, and the best course of action so you can have the lien released.

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