If you’re facing issue of back taxes, you can get tax lien any time. If you’ve received the lien issued by local municipality such as your state, county or city then tax lien will be applied only on your car, home, RV, boat etc. However, if you receive tax lien from federal government then the tax lien will be applied on everything you own. The federal government agents can acquire everything and sell it to cover the amount of back taxes. You must have seen ads in various newspapers about cars that you can purchase for just hundred dollars, a home for some ten thousand dollars or a boat for some forty dollars. All these things are the ways used by federal government or local municipality to recover back taxes.
Whether local municipality or federal government has issued tax lien, in both cases you are in a danger zone as you can loose your valuable assets and there are no options of tax relief. If you do not want to loose the items that you purchased with your hard earned money: pay them as quickly as you can. In case, you cannot your valuable assets will be auctioned publicly and you’d need to pay the taxes to the lien holder in addition to some interest. Now, you must be wondering what can take you out from this mess. Isn’t it? The easiest way is to pay the money. However, if you would have money you never find yourself in this situation. The situation can occur because of various reasons such as loss of job, divorce, death in family, met with an accident etc.
If you’ve received lien for property taxes and you have a mortgage holder then the lender needs to pay the lien as he/she receives the copy of lien. However, it doesn’t mean that the fear of losing your property is not there anymore. The lender will seize your home and sell it to get rid risk of loosing their money. If you want to escape from federal tax lien; there are some valid ways. First, is to pay taxes, penalties and interest that you owe else you can eliminate the whole amount in bankruptcy. Another better way to get rid of federal tax lien is to reduce the payable amount and pay it using Offer in Compromise.
If you’ve received a recorder notice of Federal Tax lien, you can try to get Certificate of Release of Federal Tax Lien from IRS to take care of this mess. The certificate of release will be issued if you can discharge the amount in bankruptcy, pay the amount through OIC or pay the complete amount. IRS will not issue the certificate until the whole amount gets cleared. Moreover, the amount in the lien will not show the payment you’ve made. For example, if lien shows that you owe $5,000 and you’ve already paid $1,000; it will still show $5,000. IRS needs to notify you through mail and as a taxpayer you should get an opportunity to protect your lien from getting into the public records.
0 Responses
Stay in touch with the conversation, subscribe to the RSS feed for comments on this post.