If the IRS sends you a bill and you can’t work out an arrangement with them, one of their next steps is to file a federal tax lien against you.
Tax liens cover everything you own and can essentially shut you down financially.
A tax lien is a publicly filed document that covers all of your property. It puts everyone that you do business with on notice that you owe the government tax and that at any point the IRS could step in and take your property to pay your debts. If you owe money and you’re married, they can lien your spouse’s property and they can lien your business as well.
In and of itself, a tax lien doesn’t cost you anything. The IRS isn’t taking any money that you already have from you. They’re just warning you, and everyone else of what they could do. However, here’s what happens when you have a lien:
- Banks won’t let you open accounts since they don’t want to get caught between you and the IRS.
- Existing bank and investment accounts can be frozen to prevent you from withdrawing funds from the IRS’s reach.
- Your credit report reflects the lien, preventing you from opening any new credit accounts.
- Your real estate gets frozen, since you can’t sell anything subject to a lien, and you can’t get a mortgage on anything you want to buy.
- Your business’s customers could be directed to send their payment checks to the IRS instead of to you.
- A bankruptcy might not clear the lien.
You can avoid having a lien filed against you and, if the IRS has filed one, you may be able to have it lifted.
It’s very important to have professional representation that can communicate with the IRS on your behalf, figure out what it wants from you, and work out an arrangement that allows you to retain your assets and your financial freedom. Fill out the form below to be contacted for a consultation with one of our tax experts. We can help you with your IRS tax lien problem.