What Is an IRS Tax Lien?

If you have failed to pay your taxes or have failed to file a tax return, there is a chance that the IRS will put a lien on your property. What this does is tells other creditors that the government has an interest in that property until a tax debt has been repaid. In extreme cases, the IRS may sell the property and take the money to pay what you owe.

Any IRS tax lien will be reported to the credit bureaus, which means that your credit could suffer until the issue is taken care of. The only ways that a lien will be removed is if the past due amount is paid in full or an offer in compromise has been reached and accepted by the IRS.

If a lien is placed on the property, it may remain there for up to 30 days after the outstanding balance has been paid in full. You should be aware that the IRS will not send updates to creditors, which means that your credit score will not change unless you notify the credit bureaus directly.

For those who have a tax debt of less than $25,000, it may be possible to avoid a tax lien by participating in the IRS Fresh Start program, which provides some leeway for those willing to pay their past due taxes voluntarily. If you are interested in taking part in the program, you can contact the IRS or have your attorney contact them on your behalf.

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