There are few governmental agencies that people fear more than the Internal Revenue Service (IRS). In fact, an argument can probably be made that the IRS is the most hated government agency in the United States. So, it is no surprise that when citizens get notice of a tax lien fear and anxiety take over. Unfortunately, too many people affected by tax liens try and bury their heads in the sand and ignore the tax lien notice. THIS DOES NOT WORK! In fact, ignoring a tax lien is probably the worst thing you can do for your credit and your future. Here are some tax lien basics to get you started on resolving your tax lien and getting it removed from your credit report as painlessly as possible.
What is a Tax Lien?
A tax lien is a lien imposed by the government for unpaid taxes. A tax lien is usually imposed for failure to pay personal income gift, estate, or property taxes.
How will a tax lien affect me?
The IRS has a lot of tools in its tool belt for collection. A tax lien can attach to ALL your assets. The federal government does not play around. The property they can take includes your property, stocks, bonds, vehicles, and even future assets you have not even acquired yet. The IRS can garnish your wages, your tax returns, and any other form of income you may receive. Not even social security and pensions are 100% safe from IRS garnishment.
Once a Notice of Federal Tax Lien is filed by the IRS it may cripple your credit rating and make it all but impossible to obtain credit. Having a tax lien on your credit makes it all but impossible to buy a new house or obtain new or additional credit. If you have a tax lien, removing the tax lien from your credit report should be your highest priority.
Additionally, a federal tax lien also attaches to all your business property, including accounts receivable.
Can I file bankruptcy?
Federal tax liens are not routinely or automatically discharged in bankruptcy. Most likely, any tax lien you have would survive filing bankruptcy.
What should I do?
You need to act now and learn how to remove a tax lien from your credit report. Learn everything you need to know about removing a tax lien from your credit report, and if you need tax lien help don’t feel bad asking for it!
Have you ever had to deal with the IRS before? What tips can you share with our readers about any success you had dealing with the IRS or having tax liens removed from your credit report? We would love to hear about your experiences with the IRS in our comments section below.