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Federal Tax Lien Issues

While there are a variety of mailings you can receive from the Internal Revenue Service (IRS), few are more serious than one entitled "Notice of Federal Tax Lien."

By the time you receive this notice, the federal tax lien is in place, and will affect your ownership of all of your property. The notice is a public document and is typically recorded in the state or local registers of deeds or the office of the Secretary of State. 

The Notice of Federal Tax Lien will also be reported to the Credit Bureaus and will show up in your credit report. Having such a notation on your credit report will have a negative impact on your ability to obtain credit.

The first question is how to remove the tax lien. This, of course, is the difficult part, as most individuals who are subjected to a lien filing may not have ready cash with which to pay their tax debt.

If there is a dispute with the IRS regarding the amount or characterization of how the debt arose, you may be forced hire a tax attorney to litigate the matter. You should not delay, as certain deadlines begin to run and some are jurisdictional, and if missed, could disallow some of your rights to judicial review.

If you do not dispute the amount in question, paying the tax owing as soon as possible is the best strategy. This can be accomplished in a variety of ways, depending on your situation.

Next week, we will discuss some of your options for payment of the tax debt. 

Source: IRS.com, "The IRS Collection Process," Publication 594 (Rev. 4-2012) 

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Maryland Tax Attorneys
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