Tax Liens

Understanding a Federal Tax Lien

One of the actions that the IRS can take to collect an unpaid tax debt is filing a Federal Tax Lien. A federal tax lien is the government's declaration of legal claim against your property ahead of all other creditors. The lien secures the government's interest in all of your property, including real estate, personal property, and financial assets, and establishes the right of the IRS to seize your property subject to prior encumbrances. When conditions are in the best interest of both the government and the taxpayer, options for reducing the impact of a lien include discharge of property, subordination, and withdrawal.

Release of a Tax Lien

Paying your tax debt in full is the easiest way to eliminate a federal tax lien. The IRS will release your lien within 30 days after you have fully paid your tax debt or immediately if you pay in cash or cash equivalent. The IRS can also release a federal tax lien if one of the following conditions exists:

• The lien was not filed in accordance with IRS regulations
• The release of the lien would expedite the collection process
• The IRS believes the release to be in its own best interest as well as that of the taxpayer

Appeal of a Tax Lien

You may appeal the filing of a federal tax lien to the IRS Office of Appeals (Appeals). The IRS is required to notify you within 5 business days after filing a Notice of Federal Tax Lien (NFTL). This notice may be mailed, given to you in person, or left at your home or place of business. You then have 30 days after that 5-day period to request a hearing with Appeals. Normally, the IRS will not take any action to collect your tax debt while your case is in Appeals unless they believe that the collection of the tax is at risk.

Timing is critical when addressing federal tax liens. If you contact us quickly, Tax Muscle may be able to prevent the actual filing of a lien or can facilitate the release of a lien that has already been filed.