Selling a Business with a Tax Lien on It

Do you want to sell your business, but it has a tax lien on it that’s preventing you to do so? An experienced tax attorney in Sacramento can help you in eliminating the security interest placed by the IRS on your business property. Here are some key points to remember about having a lien on your business and selling it:

What a Tax Lien Is and How It Affects Your Business

The IRS issues federal tax liens on business properties (including copyrights, trademarks, or patents, stocks, business bank accounts, and accounts receivables) if that business has fallen behind on paying back taxes and failed to respond to their Demand for Payment Notice within the set deadline. This lien won’t be removed until the debt has been fully satisfied, until a payment arrangement is settled, or until the 10-year statute of limitations has passed.

Tax liens attached to property make it difficult to sell since buyers can be discouraged about the company’s profitability or the property’s value. It will also be more difficult to refinance your property since the lien can severely lower the credit rating of your business.

In some cases, interested buyers or investors can buy your business, including the lien certificate, which means they will be responsible for paying off the debt; however, most of the time, the value of your property or the profit you can get will be very minimal. Therefore, it’s always a smart move to consult a tax attorney before things get worse.

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