A Federal Tax Lien is a public record. It notifies the public that the U.S. Government has a claim against all a taxpayer’s property and any rights to that property. A Federal Tax Lien also gives the IRS a legal claim to your property as security for payment of your tax debt.
A Notice of Federal Tax Lien may be filed after the IRS:
- Assesses the liability,
- Send you a Notice and Demand for Payment – (a bill that tells you how much you owe in taxes)— and —
- You neglect or refuse to fully pay the debt within 10 days after notification.
A Federal Tax Lien attaches to all your property (such as your house or car) and to all your rights to property held by third parties (such as your checking and savings accounts, retirement accounts, brokerage accounts and accounts receivable (if you are a business). This includes property owned at the time the lien is filed and all property acquired thereafter.
Once a lien is filed, your credit rating may be harmed. You may not be able to get a loan to buy a house or a car, get a new credit card, rent a home or apartment or sign a lease. Liens may remain on your credit report for up to 10 years or longer if they are refiled. Once a Tax Lien is in place, the IRS can use the lien to serve a Levy on your property.
Liens are a very serious matter and for these reasons require immediate attention. It is important that you work to resolve your tax liability as quickly as possible, before a lien is filed.
If the IRS is planning to file a Tax Lien, you should have professional representation. There are many options available in dealing with liens. We can usually prevent liens before they are filed, but if you already have one, we will work with the IRS to have it released. In fact, if you qualify, we may be able to assist you in having the lien released and removed from your credit report.
If we determine the IRS knowingly and negligently files or fails to release a Notice of Federal Tax Lien (after certain conditions are met), you may be entitled to recover economic damages. Some limitations apply. If your claim is denied you may sue the Federal Government (not its employees) for economic damages.