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What You Should Know About Federal Tax Liens


A tax lien occurs when the government has a legal claim against a taxpayer’s property for failure to pay a debt. These liens basically protect the federal government’s interest in a specific piece of property, which could include everything from a financial asset to real estate or even a personal possession. There are, however, certain rules that the government must abide by when issuing a federal tax lien and there are also ways to have such a lien removed. Read on to learn more about what a tax lien could mean for your own tax situation.

When Can the IRS Issue a Tax Lien? 

The government is only allowed to place a lien on a taxpayer’s property after it has taken certain steps, including:

  • Assessing the balance due; and
  • Sending the taxpayer a bill explaining how much is owed (Notice and Demand for Payment).

If the taxpayer in question still neglects or refuses to pay the full amount of the debt, the IRS can move forward with filing a Notice of Federal Tax Lien. This is a public document that alerts creditors to the government’s legal right to the taxpayer’s property. Liens can be attached to:

  • All of a taxpayer’s assets, including property, vehicles, and securities; and
  • A taxpayer’s business property, including accounts receivable.

Fortunately, it is possible to remove a federal tax lien with the help of an experienced lawyer.

How Do I Get Rid of a Tax Lien? 

The quickest way to remove a federal tax lien is to pay off the tax debt that instigated the placing of the lien in the first place. In these cases, the IRS will typically release the lien within 30 days of receiving full payment. When payment is not possible, however, there are other options for reducing the impact of a lien. A taxpayer can, for instance, seek to discharge, or remove the lien from a particular asset. Alternatively, taxpayers can seek to subordinate the lien, which doesn’t remove it, but allows creditors to move ahead of the IRS when it comes to collection, which in turn can make it easier to obtain a loan to pay off the tax debt. Finally, a withdrawal removes the public notice of the lien, although the full amount of the debt owed to the IRS will still be due.

How Do I Avoid a Tax Lien? 

Taxpayers can avoid a tax lien by filing and paying their taxes on time. If doing so isn’t possible, taxpayers can still enter into payment plans that will help them settle their debt over time and also avoid having a lien placed on their property. It’s always important to respond to any correspondence from the IRS, as this can help taxpayers avoid the assessment of a lien based on a mistake or misunderstanding.

Call an Experienced Florida & IRS Lien Attorney 

The rules surrounding federal tax liens are complex and often leave taxpayers at a loss when it comes to their next steps. Experienced CPA, former FBI Special Agent, and dedicated Florida tax lien lawyer Ronald Cutler, P.A. can help. Call us at 386-490-9949 to set up a free one-on-one consultation and get started on your case today.