What is the Best Way to Deal with a Tax Lien?
Owing money to the Internal Revenue Service (IRS) is not the worst thing that can happen to you financially. It’s what can happen if you neglect to respond to the IRS. Most of us already know the ultimate punishment of tax debt—jail!However, circumstances need to be extreme if it were to ever reach that point. The IRS will take other steps in acquiring what is owed to them before taking those steps, and one of those ways is to issue a tax lien.
What is a Tax Lien?
A tax lien is when the government seizes your property due to unpaid taxes. It’s very similar to having a car repossessed for failed payments, or the bank foreclosing a home because of a defaulted mortgage note. When you neglect to pay your taxes, the federal government reserves the right to collect what is rightfully owed to them whether it is by liquid or tangible assets.
In order for the IRS to induce a tax lien, the following must occur:
- The IRS must assess exactly how much you owe and make an official record of it in their books.
- The IRS must notify you by mail about your outstanding tax debt. It will most likely be titled as “Notice and Demand for Payment.”
Even after this matter, the IRS gives taxpayers ample opportunities to contest the Notice and Demand for Payment. By simply communicating with the IRS, many issues can be resolved. The one thing that you shouldn’t do is ignore it.
Read our article about “How to Communicate Effectively with the IRS.”
Things That Could Lead to a Tax Lien
Most people might be familiar with the term “wage garnishment.” Oftentimes, deducting a certain percentage from a taxpayer’s account is enough to settle the debt over a period of time. Yet, there are other instances when it isn’t enough. This is usually when the amount owed is such a substantial amount, that even wage garnishments couldn’t settle the balance. In such cases as these, the federal government will take out a tax lien on your property.
What Can I Do to Avoid a Tax Lien?
The best way to avoid a tax lien is to pay your taxes. If for some reason, you are unable do this in a timely manner, seek the help of a professional who can quickly resolve any tax issues you might have or trying to avoid. Also, be mindful of any letters that you receive from the IRS. It is recommended to either call the IRS to confirm that the letter is official or find a tax relief service to take care of the matter for you.
Success Tax Relief, the Tax Resolution You Need
The experienced professionals at Success Tax Relief understand that not everyone is comfortable dealing with the IRS. We are familiar with the processes that involve resolving tax debt for unique cases. In addition to tax relief, our specialty involves arranging affordable installment agreements, managing IRS audits and more. For a detailed description of the tax services we offer, visit our official website here.
Contact our office online to schedule a consultation today or call 877-825-1179.