Tax liens are often confused with tax levies, but there are several key differences between the two collection strategies.

Unlike a tax levy, a tax lien is not a seizure of assets. If the IRS places a lien on your home or vehicle, you will still be able to live in your home and use your vehicle. But, if you try to sell your home or vehicle, the proceeds of the sale will be used to pay your tax debt. 

Once a Notice of Federal Tax Lien is issued, it is automatically attached to your belongings and limits your financial abilities with those possessions. The first would be your assets; these include (but are not limited to) your house, car(s), boat(s), your savings account, and even assets you may acquire in the future, such as a 401k.

Furthermore, a tax lien is a public notice of your tax liability.

When the IRS submits a Notice of Federal Tax Lien, this notice will appear in public records. This blemish on your public records notifies creditors of your unpaid taxes.

Even though a tax lien is not reported on your credit, it can limit your ability to apply for or receive loans in certain circumstances. 

Not even bankruptcy will erase your tax lien. If you try to file for bankruptcy, your federal tax lien could persist.

Tax liens require action immediately. Paying your taxes in full is the easiest way to get rid of your Tax Lien.

Your lien will be discharged within 30 days of your payment being processed. However, most people owe amounts so significant, they cannot pay in full within such a short time frame. If you believe that the amount you owe is incorrect, you have the right to appeal the process.

Other options for removing the lien and resolving your tax bill:

• Discharge of Property – removes your lien from a specific property.
• Subordination – allows other creditors priority over the IRS, which is beneficial if you are trying to secure a loan or mortgage. You can also apply for a withdrawal of the tax lien.

Even if the tax lien is removed, you will still be liable for the full amount of your federal tax liability unless you take other actions.

If you have a tax lien call us at 833-419-RISE (7473) to discuss your options.