What Happens if a Tax Lien is Filed on Your Property?

What Happens if a Tax Lien is Filed on Your Property?

In the 21st century, rare are those who don’t live in fear of having IRS knock on their door anytime now, looking to collect the money owed. In the fiscal year 2012 alone, the IRS filed over 710,000 Notices of Federal Tax Liens. But you’ve got to pay, what you’ve got to pay, right? Sure.

However, before you cough up even the last penny you’ve got, let’s see what a tax lien is and how you can deal with it.

Tax Lien 101

A tax lien is a government regulated document alerting the general public of your unpaid debt. Usually, having a tax lien on your property means a significant drop in your property appeal; potential buyers typically don’t want to get involved with the government, so you may end up having to significantly lower the price of your property to have it sold. However, if your property has a tax lien on it, but it gets sold, your debt is paid off to the government, and you get the rest of the money. For instance, if the debt was $50, 000 and the property sells for $70, 000, you’ll be getting the extra $20, 000.

There are several types of tax liens, varying from a federal tax lien on your property to a state tax lien or a tax lien from your county or city. If you are behind on homeowner association fees, you may have a “super lien,” as well.

Lien vs. Levy

Getting a federal tax lien is a serious predicament, but it still isn’t an unsolvable one. Usually, the government looks to work with property owners and grant them installment options to help them pay off the debt. Yes, paying off a tax lien is a substantial financial inconvenience, but it’s still a solvable one.

Contrary to a lien, a levy is a much more severe situation. Unlike a lien which is a legal claim against the property, a levy is a lawful seizure of your property aimed to satisfy the tax debt. Whatever you do, make sure you don’t end up with a levy on your property. How will you know if you’ve got one? You’ll receive a letter or a Notice of Intent to Levy and Notice of Your Right to a Hearing.

Avoiding liens

While your first instinct upon receiving an IRS letter might be to ignore it, do anything but that. Make sure you immediately contact the number on the paperwork you received and see what situation you are in. You’d be surprised how helpful the government is when it comes to trying to find the best deals for taxpayers.

Depending on your debt, the IRS may allow subordination, installments, moving the deadline, etc. If you are a good candidate for an Offer in Compromise, the IRS will allow it, and you’ll get to pay the debt with a lesser amount.

Get Professional Help

Golden Tax Relief has been helping individuals and businesses with bankruptcy, tax liens, wage garnishments, and more. Golden Tax professionals thoroughly review your unique case with the purpose of developing a thorough plan and finding the best solution to resolve your tax problems quickly and efficiently. Contact us today to get the best expert help with your financial problems!

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