Tax Lien

The IRS can make your life miserable by filing a federal tax lien against you.

When a tax lien is filed against you, it is a frightening and confusing time.  But the worst thing you can do, is do nothing.  Your tax problems will not go away by themselves and waiting only makes matters worse.  This is a serious legal issue and you need an experienced, local tax attorney like Bill Smith to solve the situation and get you out from under the IRS.

The federal government is aggressive and experienced at collection of taxes.  This is what they do.  And while it’s true that they want your tax problem solved as much as you do, don’t be fooled into thinking a “kinder, gentler” IRS will give you a good deal. It’s their tax agents’ jobs to collect the maximum amount of taxes, penalties, and interest.  Many taxpayers make the costly mistake of trying to handle a conflict with the IRS by themselves.  You should instead hire an expert tax attorney who knows how to resolve these issues.

Here are some things you should NOT do:

Do not jump at an IRS offer of an installment plan:

These agreements, which may seem like a good way out of your tax predicament, are stiff payment plans that end up costing you more than it would have if you’d retained expert tax representation.  Local attorney Bill Smith is better equipped than you to protect your rights and seek a resolution that is in your best interest—not that of the IRS.

Do not sign any forms sent to you:

When a tax lien is filed against you, the IRS will try to contact you by mail and telephone. One may be a waiver, which extends the period during which time the IRS can collect the tax.  This obviously does not help your case!

If contacted by the IRS by phone, do not give out information:

These IRS employees are well trained in how to get information that could later be used to seize your possessions and assets.  They are just doing their job—to get the highest recovery possible for the government.

But the good news is the IRS is required to respect your right to obtain tax representation. Once you hire Bill Smith, the IRS cannot contact you.  They now have to deal with Bill.  He will see that your rights are protected.  He will minimize the amount of taxes, penalties, and interest you have to pay.

There are many reasons people fall behind in paying their taxes.  But don’t let fear or uncertainty make matters worse.  An ignored tax lien can lead to an IRS tax levy which could empty your checking and savings account or take away most of your paycheck.  Instead contact Bill Smith today.  With more than 30 years experience he can manage and resolve your tax lien problems, restore your good credit and give you back peace of mind.

Have IRS Tax Lien Problems? Get Help Dealing With Your Tax Lien From A Local Dallas Attorney

The IRS can make your life miserable by filing a federal tax lien against you. The IRS can place a tax lien on your property when you owe federal income taxes that are overdue. When the IRS files a tax lien, they file a document with the country government that creates a public record indicating that you owe an unpaid tax debt to the government. A tax lien works to protect and preserve the government’s ability to collect money that it determines that it is owed. The tax lien becomes public record and may have a significant negative impact on your life. It can negatively impact your credit, can prevent you from purchasing a new vehicle or receiving other lines of credit. It can adversely affect your ability to buy property, take out a lease on a home, or find employment.

IRS Tax Liens Can Harm Your Personal Credit

An IRS lien is different from an IRS levy. An IRS lien is a document filed with your local county government letting the general public know that you have an unpaid debt to the federal government. The lien protects the government’s ability to collect the money it is owed. In contrast, an IRS levy is the action of collecting the taxes owed by seizing a bank account or garnishing wages.

How can you manage a tax lien when it is filed against you?

Liens can only be Released, Discharged, Subordinated or Removed. When you have a tax lien placed against you, we can work to help you determine the best course of action for your situation. Your options may include:

  1. Pay the IRS the tax bill in full (including any penalties).
  2. Submit an acceptable Offer of Compromise and then fulfill its terms.
  3. Let the statute expire (this requires 10 years from date of assessment).
  4. Claim that the tax lien was filed by mistake, and file an administrative claim to have the IRS remove the lien from your record.

We recommend that you meet with us before deciding on a plan. Remember that a release of lien occurs after the underlying tax liability has been satisfied in full. This can often be done by a monthly payment plan, by paying it outright in a lump sum, or an accepted and paid Offer in Compromise. Most liens are generally released after 10 years from the date of assessment, but the IRS may choose to re-file the lien for another 10 years.

Possible resolutions:

A Certificate of Discharge of a lien:

This is generally used when selling real property and the IRS normally is paid in full with the sale proceeds.

A Certificate of Lien Subordination:

This is generally used in re-financing real property, allowing the re-financing of the property transaction to occur under certain situations.

Removal of tax lien:

The IRS will only consider the removal of a lien in rare cases where they admit they made an error by filing the Notice of Federal Tax Lien in the first place.

Leveraging assets: often taxpayers find themselves in a difficult situation under IRS liens where they have property that they would like to borrow against, but because of the Federal Tax Lien, they cannot get a loan. We assist clients in resolving their federal tax lien issues once and for all.

Get Expert Legal Help Solving Your Tax Lien

When you are facing the IRS with a tax lien problem you need an experienced, local attorney help you find the best solution to your problem. If you are late on delinquent on your taxes and you are facing the possibility of a tax lien, then you need the expertise and experience of William A. Smith on your side. We will help you understand your legal options and help you achieve the result that will work for your situation. We can often work to help you receive an acceptable Offer of Compromise that may include reduced payments or installment agreements. The results may vary based on your specific situation, but William A. Smith has the knowledge and experience working with the IRS to know how to work to find a positive result for your situation.

What is a lien?

A lien is a charge or an encumbrance that exists on the property of another as security for a debt or other obligation. A tax lien does not divest the taxpayer of his or her property or the rights to transfer property.

What is a Levy?

A levy divests a taxpayer of property and transfers constructive ownership to the government.

What types of Liens are there?

  • Consensual
  • Home Mortgage
  • Common Law Lien
  • Inn Keeper’s Lien on the belongings of a delinquent tenant
  • Statutory Lien
  • Federal Tax Lien
  • General Lien – All property of a debtor
  • Specific Lien – most Consensual and Common Liens
  • Liens are governed by Code Sec. 6321 – If any person is liable to pay any tax, neglects or refuses to pay the same after demand, the amount shall be a lien in favor of the United States upon all property rights.

What makes a Lien Valid?

  • There must be a valid assessment
  • The IRS must make a demand for payment
  • Taxpayer must have either neglected or refused to pay after demand

What Property does the General Tax Lien attach to?

  • The federal tax lien attaches to all property belonging to the taxpayer on the date of the assessment
  • The Lien also attaches to after- acquired property
  • The Lien is an ongoing, virtually living thing – It continues in existence until the liability is satisfied or becomes unenforceable

Does a Tax Lien make the Government a secured creditor?

Once a tax lien exists, the IRS must give the taxpayer a 30-day notice before levying upon and seizing the taxpayer’s assets. Once the tax lien exists, the government becomes the taxpayer’s secured creditor. The security is the tax lien. The government is entitled to payment before general, unsecured creditors.

Does the Tax Lien interfere with the transfer of property?

A tax lien can severely hurt the taxpayer’s credit standing. Another menace of the tax lien is that it interferes with the transfer of any property to which a paper title is necessary. This includes real estate and personal property subject to recorded security agreements or UCC filings. The tax lien either prevents the property from being transferred or follows the transferred property, whether that transfer is for consideration, gratuitous or even fraudulent. A valid retroactive disclaimer under state law of the interest of the beneficiary under a will does not prevent the tax lien form attaching to the disclaimed property.

What is the difference between a tax lien and the discharge of property subject to a lien?

A release of a tax lien completely extinguishes the lien. A discharge operates to discharge specific property to which the lien has attached.