Received a Federal Tax Lien? Here is the Way Ahead

Federal Tax Lien

A federal tax lien is one of the last things you would want to receive as a taxpayer. Under a tax lien, the IRS claims the rights to the defaulter’s assets, such as real estate, bank accounts, and vehicles. The lien may even limit the taxpayer’s ability to get credit in the future. Taxpayers, who file for bankruptcy, may still have to continue paying the lien. If you too have received an IRS tax lien, here are a few things that you need to know to find your way out.

The Options at Hand

1. Pay Your Debt in Full

The quickest way to get rid of a tax lien is paying the outstanding debt in full. Once you have settled the outstanding tax debt, the IRS will release your lien within a period of 30 days. You can pay online directly through your bank account using your phone or mobile device and get an instant payment confirmation, too.

2. Discharge

“Discharge” helps remove lien from a specific property. Taxpayers may get a discharge of property from a federal tax lien under one of the Internal Revenue Code (IRC) provisions. Once the property is discharged, taxpayers need to sell it off and settle their tax debts.

3. Subordination

Subordination of a lien is different from the release of a lien. In the case of subordination of a lien, though the lien stays as is, its priority gets lowered as another lien against the same property gains priority over the lien in question.  This means the other creditor gets the right to be paid before the tax lien gets paid.

4. Withdrawal

Under certain circumstances, you may request the IRS to withdraw the Notice of Federal Tax Lien issued in your name. The benefit of a lien withdrawal as compared to a lien discharge is that once withdrawn, the lien does not reflect on the taxpayer’s credit history, while it does reflect in the case of discharge.

Must Read: Tax Lien vs. Tax Levy: Examining the Differences

Last Few Words

Though there is an option to contact the IRS directly and request a lien removal, it is always advisable to seek legal professional help when dealing with issues as intricate as tax liens. If you have received a notice of federal tax lien or have any questions related to tax liens, please call The Law Office of Nick Nemeth and schedule a free no-obligation consultation with Nick personally.  You can reach us at (972) 426-2553 or fill out our contact form and we will get back to you shortly.

Rate this post