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Tax Lien Help
Having a tax lien filed against you or your business can happen to anyone. However, receiving that letter from the IRS or state in the mail is one of the scariest experiences that our clients have. It means that a serious tax debt situation is present.
Fortunately, if you've had a tax lien filed against you, you are not alone and there ARE options for tax lien help According to the IRS there were about 1,042,230 Notices of Federal Tax Liens filed in 2011. While this is technically a decrease of more than 50,000 liens from 2010 and may represent greater leniency with the filing of liens by the IRS, there still were more than 1 million tax liens filed last year alone!
At this point those that are looking for tax lien help must be aware of several tax lien basics as well as understand the options available.
What is a Tax Lien?
A Notice of Federal Tax Lien filing is done by the IRS to put a taxpayer's general creditors on notice of the existence of a federal tax debt. It is not a step that is required by the IRS to enforce collection against a taxpayer. This means that the IRS can and will seize assets even if no tax lien has been filed.
When is a Tax Lien filed?
The tax authorities have complete control and discretion over when the lien filing occurs. Once it's been determined that the tax debt is owed and not paid after a period of time, the IRS can and will usually file liens quickly and with few exceptions - such as with debts under $2,500.
The filing of a federal tax lien is the IRS' first line of defense. In other words, the IRS traditionally files a tax lien very soon after it is established that a taxpayer has an unpaid assessment that cannot be immediately paid in full.
What can be done to deal with a Tax Lien?
In 2011 the IRS began its "Fresh Start" program which introduced major changes to lien filing guidelines that had not changed in over 30 years. The program increased the threshold for filing a lien from $5,000 to $10,000 (aggregate balance due) and said that under very few circumstances should a lien be filed on a balance due of under $2,500.
The program also broadened the circumstances under which the IRS may consider a lien withdrawal after a debt is paid and introduced the lien withdrawal/Direct Debit installment agreement program.
This means there are options to not just have your tax debt resolved, but even have the lien withdrawn all together. This would take the tax lien off of your credit report permanently as if it was never filed in the first place.
It's important to note that there are specific criteria that must be met before achieving these outcomes. However, it's worthwhile to check in with one of our licensed tax advisors for a free consultation to receive tax lien help and truly understand what options are available to you.