What is a Tax Lien and how can I remove it?
If you are a property owner, you know about paying property taxes. Did you know that if you do not pay your property taxes, a tax lien can be placed on that property?
Do you know what a tax lien is? Do you know what it means?
What is a Tax Lien?
In law, a lien is a form of security interest that is granted over a piece of property to secure the payment of a debt or performance of some other obligation. The owner of the property is the one who grants the lien. The owner is referred to as the lienor. The person benefiting from the lien is known as the lienee.
A tax lien is a lien that is imposed on property to secure the payment of taxes. Tax liens may be imposed for delinquent taxes owed on real or personal property. A tax lien can also be imposed as a result of failure to pay income taxes or to settle other tax problems.
From this, you can see that there are different types of tax liens that can be imposed on different types of property. The focus of this article is on IRS tax liens, state tax liens and local government tax liens.
IRS Tax Lien
An IRS tax lien is a federal tax lien that is filed against you when you owe taxes to the IRS. It is filed with the county clerk in the county in which you live or your business operates.
These IRS tax liens are a matter of public record. As a result of this, they will appear on your credit report. This usually makes it hard or impossible for you to be approved for financing on a home or car.
After the IRS tax lien has been imposed on your property, it becomes impossible for you to transfer or sell the property with a clear title. When the property with the lien is sold, the IRS will take the proceeds of the sale to satisfy your Tax Debt.
There are four things that can happen with an IRS tax lien. The lien can be removed, subordinated, discharged or released.
- Removal - In rare cases, the IRS will consider removing the lien. This happens when the IRS admits that they made an error in filing the Notice of Federal Tax Lien.
- Subordination - A lien is subordinated when real property is re-financed. The re-financing of the property is allowed under certain circumstances.
- Discharge - A discharge of the lien happens when real property is sold. The IRS is usually paid in full from the proceeds of the sale.
- Release - A release of the lien occurs when the tax liability has been paid in full. This usually happens when the lien is paid outright with a lump sum, via a monthly payment plan or in accordance with an accepted and paid Offer In Compromise.
State Tax Liens
State tax liens are liens that are imposed on the property of a taxpayer that the tax collector can use when the taxpayer defaults on the payment of taxes. These state tax liens include items like withholding tax, unemployment tax, sales tax, Workers Compensation and property tax.
Every state deals with these liens differently. Each state has different agencies and procedures in handling these state liens. In many instances, state taxing authorities are even more aggressive than the IRS in the collection of taxes. States also usually offer fewer options for resolving the liens than the IRS.
Local Government Tax Liens
Local government tax liens are liens imposed by the city, county, parish (Louisiana), borough or census area (Alaska) in which you live. Local government tax liens involve things like school, city and county taxes.
Local government tax liens are also dealt with differently, just as each state handles liens in diverse ways. These local governments deal with liens in accordance with the laws of their respective states.
If you are facing an IRS, state or local government tax lien, it should be obvious to you by now that this is something you are going to need help in dealing with. You will need the counsel and advice of a qualified Tax Attorney.
You need a lawyer who is experienced in tax law. Tax attorneys focus on the complexities and intricacies in the field of tax law. They work with these types of cases on a daily basis.
Tax law is an area of law that involves changes almost every year. Tax attorneys keep up with these changes in order to give you the best current advice and representation. They are your best hope for getting real Tax Relief.