Tax Liens

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If you are delinquent in paying back taxes, you are subject to a serious collection action called a tax lien. You need the help of a qualified tax specialist to take action now to prevent having your finances restricted.

The Basics and Dangers of Tax Liens

Tax liens are legal claims filed by the IRS against anything of value which you own. This can be your home, business, income, automobiles, jewelry, property, etc. It is basically a public announcement of your back tax debt and gives the IRS precedent over any other creditors. Our team here at SC Tax Resolution is experienced in tax law and will help you obtain a more affordable solution to pay your tax liability.
Before a tax lien can be filed against you, the following criteria must be met:

  • The tax liability has been assessed
  • A written “Notice and Demand for Tax Payment” has been sent
  • You have refused or are unable to pay off your tax debt within ten days of receiving the notice

Once this criteria is met and a lien is established it will appear on your credit report. Having record of an IRS attachment in your credit history can ruin your financial future. Your tax lien remains a public record until the amount is paid in full. This is a method used by the IRS to embarrass or intimidate you into accepting an impossible agreement.
Attempting to negotiate settlements for back taxes with the IRS on your own can lead to increased penalties and fines, additional financial stress, and missed opportunities. You need the help that an experienced tax professional can provide. Our professionals know your financial rights and what repayment options are available for what you owe. We will represent you in all negotiations to bring your problems to an end.

Some of our most skilled areas include:

  • Prevention, Withdrawal and Release of IRS tax liens
  • Repayment negotiations (such as debt reduction and installment agreements)
  • Tax debt elimination
  • Accurate submission of unfiled tax returns

Lien versus Levy: What is the difference?

A levy is an execution of power to seize property, while the federal tax lien remains a dormant right of the government. That right can be awakened by events such as the taxpayer’s sale or attempted sale of the property, or the IRS seeking to foreclose on the lien through a judicial procedure.
A lien can lull the taxpayer into a false sense of security by allowing use of the property or the opportunity to derive income from it. Sometimes the taxpayer may even sell the property to a buyer who has no knowledge of the lien, without incurring any legal obligation. But forget it’s there and it may spring up out of the legal shadows when you least expect it.
The lien is authorized by the Internal Revenue Code, which states that if anyone liable to pay any tax neglects or refuses to pay it after demand has been made, the amount—including interest, tax, penalties and any additional fees—shall be a lien in favor of the United States on all property and rights to property, whether real or personal. The IRS is required to give notice and demand payment 60 days after assessment of the tax debt.

Three things must exist for tax liens to come into existence:

  • the assessment of the tax liability
  • the demand for payment and
  • the refusal or neglect to pay it

Requesting a Release

The Notice stays in place until you pro-actively take action to release it. Typically, it will be released within 30 days if:

  • The debt is paid in full.
  • The amount owed is adjusted appropriately.
  • An accepted bond guaranteeing payment is provided.

It can actually be withdrawn if:

  • It is determined that the filing was not done according to procedure
  • The taxpayer chooses to participate in a payment plan (this is more easily negotiated with the help of a qualified tax
  • professional acting on your behalf), or
  • It would be in the best interest of both parties to withdraw