FAQs about IRS Tax Liens

The IRS uses tax liens to collect payment for any tax debt owed by an individual. A tax lien is the government’s claim to your assets. Once it’s filed, it can be attached to just about everything you own. If you received a letter from the IRS stating their intention to place a lien on your assets, it pays to know what you’re up against. Here are some frequently asked questions about tax liens and their corresponding answers to help you out.

How will a tax lien affect me?

Once a lien is filed, all your creditors will be notified about it. This can make it impossible for you to borrow money in the future not only from your current creditors, but other lenders as well. That’s because a tax lien will appear on your credit report, available for all lenders to see.

What assets can be seized by a tax lien?

The law keeps the definition of assets very broad and open to interpretation. This means a tax lien can practically cover all assets owned by a taxpayer, including any future property he may acquire, whether tangible or intangible.

How can I avoid a tax lien?

Complying fully with tax laws is the best way to avoid a tax lien. If you are unable to pay your taxes, your best recourse is to contact the IRS and negotiate a payment agreement. An IRS tax lawyer can help do this for you, not to mention provide you with information to steer clear of any trouble with the IRS.

 

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