Tax Liens—An Overview

A tax lien protects the federal government’s interest in your assets and/or property in the event that you are unable to pay your tax debt. This action can apply to any property you already own or come to own during the debt’s lifespan.

If you fail to file your tax return, the IRS will compute your liability based on the information supplied by third-party sources, such as banks or employers. This information will be the basis for a Substitute for Return (SFR), which allows the IRS to evaluate your tax for debt, and if found, begin collection action. If this debt remains unpaid within the allotted timeframe, your assets are ultimately at risk of seizure.

A tax lien can impact your credit score negatively. If this happens, you’ll find it hard to obtain any type of loan or mortgage. Even acquiring a credit card will be difficult. In addition, the IRS will issue a public notice of your tax lien, which could damage your reputation greatly.

Taking the necessary measures to resolve your tax debt and pay it off as quickly as possible can reduce your chances of having to deal with a tax lien. Learn more about what you could do to avoid this by consulting an accountant. If, however, you’re already in dire straits and in need of representation, an IRS tax lawyer is what you need.

 

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