April 30, 2024

Federal Tax Liens

Written by: Elisa Meyer

You: Owe taxes to the IRS.

IRS: Sends you a bill explaining how much you owe.

You: Do not or will not pay the balance due the IRS.

IRS: Files a public Notice of Federal Tax Lien.

But what does this mean? What is a federal tax lien? How does it affect you?

A federal tax lien is a public notice filed by the IRS to alert your creditors that the government has a legal right to your property. The federal tax lien attaches to ALL your present and future assets such as personal property, vehicles and securities and not just personal assets but also business assets including all rights to business property and accounts receivables. The lien may limit your ability to obtain credit. And guess what? Filing for bankruptcy does not discharge your tax debt or federal tax lien.

How do you get rid of a federal tax lien?

Paying your tax debt, in full, is the only way to get rid of a tax lien! The IRS will release your lien within 30 days after the payment. The IRS does have other options such as the discharge of certain property, subordination, and withdrawal of the lien, but these can be time consuming and labor intense.

How do you avoid a federal tax lien?

To avoid tax liens file and pay your taxes on time and in full! If you cannot file or pay the IRS on time, do not ignore the letters and correspondence sent to you! The IRS does offer payment options to pay over time.

Help Resources

Centralized Lien Operation — To resolve basic and routine lien issues: verify a lien, request lien payoff amount, or release a lien, call 800-913-6050 or e-fax 855-390-3530.

Taxpayer Advocate Service — For assistance and guidance from an independent organization within IRS, call 877-777-4778.

Centralized Insolvency Operation — If you are questioning whether your bankruptcy has changed your tax debt, call 800-973-0424.