What To Do If You Receive A Tax Lien Notice?

In this article, you will discover:

• The difference between a tax lien and a tax levy.
• How long a tax lien remains in place.
• How to resolve a tax lien, and how an attorney can help.

What Is The Difference Between A Lien And A Levy?

A levy happens when the IRS or state Department of Revenue takes the money you owe out of your bank account or takes a portion of your weekly or monthly income, depending on how you get paid. A levy can be hurtful to you financially.

A lien, on the other hand, is like a mortgage. It is a document filed at the courthouse saying the IRS has a claim on all property you own in that county for the total amount of tax you owe. It is not an active collection method. Nothing happens unless you sell the property. If that happens, the closing attorney must pay the IRS the money you get in the closing, up to the amount owed.

How Do I Find Out If The IRS Has Filed A Lien Against Me?

To find out if the IRS has filed a lien against you, call the IRS and ask them. Note, however, that they have a backlog of calls, and you would be on the phone for a very long time. The best plan is to go to the Record of Deeds office and ask them to look that up for you.

If you have access to a computer, you can go online to the Record of Deeds office in your county and search for your name and any liens.

Will A Tax Lien Affect My Credit Score?

A tax lien may or may not affect your credit score. The IRS does not send notice of the lien to the credit reporting agencies. However, the agencies do look at lien records. They may or may not pick up on your lien. If they do, they will report it, and, of course, that will affect your credit score.

How Long Does An IRS Lien Stay In Place?

An IRS lien stays in place until the tax that it reports becomes uncollectible. The IRS has 10 years to collect a tax from the time the return is filed. If you have a 2017 tax return that you do not file until 2020, then the IRS has until 2030 to collect that tax.

That is noted on the face of the lien. If you look at a copy of your lien, you can see how long the IRS has to collect and how long that lien will stay in effect.

What Are My Options For Resolving A Tax Lien?

The best option is to pay the tax on that lien. If you pay the tax in full, the lien will be released. If you owe less than $50,000 under the Fresh Start Program, the IRS will almost always release the lien if you file the proper paperwork asking them to do so. If you feel you do not owe the tax, you can appeal the filing of the lien based on the assertion the IRS did it incorrectly.

Still Have Questions? Ready To Get Started?

For more information on how to handle a tax lien, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (864) 271-7940 today.