Tax Resolution

Understanding a Federal Tax Lien

A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest in all your property, including real estate, personal property (your home and cars) and financial assets, including bank accounts.

The IRS files a public document, the Notice of Federal Tax Lien, to alert creditors that the government has a legal right to your property.

How a Lien Affects You

  • Assets— a lien attaches to all of your assets (such as property, securities, and vehicles) and to future assets acquired during the duration of the lien.
  • Credit— once the IRS files a Notice of Federal Tax Lien, it may limit your ability to get credit. It does go on your credit report.
  • Business— the lien attaches to all business property and to all rights to business property, including accounts receivable.
  • Bankruptcy— if you file for bankruptcy, your tax debt, lien, and Notice of Federal Tax Lien may continue after the bankruptcy. Bankruptcy generally does not get rid of your tax debt.

The Next Step is a Levy

A lien secures the government’s interest in your property when you don’t pay your tax debt. A levy actually takes the property to pay the tax debt. If you don’t pay or make arrangements to settle your tax debt, the IRS will seize and sell any type of real or personal property that you own or have an interest in. They will also take all the money out of your bank accounts.

Don’t Procrastinate

Many tax payers choose to ignore tax problems. The longer you wait the worse it gets. Tax issues do not go away on their own. You will wake up one morning and find all your bank accounts have been emptied by the IRS. Once they take the money, you cannot get it back without very involved help.

Help Resources

Here, at Essex & Associates, not only can we adequately resolve the tax problem through direct contact with the IRS, but we can also save you money that you would be paying in interest and penalties at any other firm. Please contact Jessica Mullins at jmullins@essexinc.biz to begin the extensive process with a consultation.