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What to do if the IRS hits you with a tax lien

| Jul 4, 2016 | tax liens

If the IRS has put a tax lien on your company, it can be very difficult to continue doing business. You may lose control of your accounts receivable, and suddenly be unable to obtain credit. Your business might not grind to a complete halt, but a tax lien can be a serious drag on your ability to function and grow.

Obviously, this makes any business affected by a tax lien eager to get rid of it as soon as possible. Here are some options Maryland taxpayers can consider for dealing with a federal income tax lien removed, as provided by the IRS:

  • Pay the tax debt, if you do not dispute the amount and can afford to pay it. Once paid, the IRS will remove the lien within 30 days.
  • Subordination. This is a procedure that puts other creditors ahead of the IRS in the “line” to get paid. This does not remove the lien, but may make it easier to obtain further credit.
  • Discharge of property. You may be able to get specific property “discharged” from the lien, so that the property is no longer affected by it.
  • Withdrawal. A withdrawal stops the IRS from competing with other creditors, and the IRS removes the public notice of the lien. However, it does not remove the underlying tax bill.

This is an example of how you almost always have options when your business is dealing with a tax controversy. Being represented by an experienced tax attorney can put you in a position to do what is best for your business.