Things to know about Tax Lien
  • November 24, 2020
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A lien, by definition, is a hold on property imposed by the government in a scenario of accumulated back taxes by a taxpayer. A lien is designed to protect the interest of the government as well as forewarn the creditor that the IRS has a legal right to their property. Apart from personal property, a tax lien is applicable to real estate, vehicles, and financial assets. If a federal tax lien isn’t taken care of by the taxpayer, the government may impose a tax levy which is the actual seizing of property, assets, and bank accounts to cover the taxes owed. To avoid a tax levy, it is advisable that taxpayers learn about tax liens and get professional help when working with the IRS towards a resolution.

Related Blog: Tax Lien vs. Tax Levy: Differences & What to Expect

The Impact of an Imposed Tax Lien

Apart from getting your property, vehicles and bank accounts seized, there are several other effects of a tax lien which can adversely impact your financial credibility and future transactions. Your creditworthiness takes a hit and even though a tax lien might not appear on your credit report, the IRS can still file a public notice, announcing that the government has a right to your assets. This jeopardises your ability to obtain loans. A lien also negatively impacts a home sale or refinancing of a house as your equity can be used to pay off your tax debts. Another unfortunate outcome of a tax lien is the huge amount of time consumed in filing paperwork, dealing with call center executives, and multiple in-person visits with a revenue officer as the IRS transfers most of its overdue taxpayer accounts to its Automated Collection System or ACS.

Related Blog: How to Make an Offer in Compromise to Settle a Tax Debt

Measures to get a Tax Lien Removed

There are several ways in which a Tax Lien can be removed. The most direct and obvious one being paying the outstanding tax bill. It is advisable to cooperate with the authorities during the procedure and comply with all guidelines while keeping all communication channels open. The taxpayer may also get into a Direct Debit Installment Agreement with the IRS, allowing the latter to deduct at least 3 consecutive payments directly from the taxpayer bank account. This also makes the taxpayer eligible to request the IRS to withdraw the Tax Lien from their public record. A creditor may request the IRS for an Offer in Compromise, allowing them to settle their back taxes for less than what they owe. This step involves a significant amount of rules and the applicants need to have paid all their tax returns as well as make estimated tax payments for the current year. In a scenario where a tax lien seems unjust, the taxpayer reserves the right to file an appeal asking for a hearing from the Office of Appeals. A final step, although unadvised until there isn’t another option available, is filing for bankruptcy. It entails the ability to get rid of an accumulated tax debt altogether. It is a long process involving a lot of paperwork, rules, and a low rate of success.

Final Words

If you are facing a Tax Lien or are afraid that you might be under the IRS’ scope for one, it is highly recommended to find a professional tax attorney to help you with your case and find tax debt resolutions to any tax disputes. Contact the Law Offices of Nick Nemeth to discuss your tax problems and find the best solutions for your issue. Simply call (972) 426-2553 or email us at, and we will take it from there.

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What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
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I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
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Eddie WaltEddie Walt
19:44 12 Jul 22
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