What is a tax lien?

Tax Lien

The IRS may issue a tax lien for any past due taxes which exceed a certain amount. 

• A tax lien does not show up on a credit report. 

• A tax lien can hinder your ability to purchase a home or get certain types of credit. 

• A tax lien can be removed. 

• A tax lien is not a levy. 

• A tax lien is made public 

How does a tax lien affect you? A tax lien will attach to any asset you own. This can include real estate property, vehicles, business property and business assets including accounts receivable. 

Why should I be concerned about this? A tax lien can also attach itself to future assets you may purchase. Let’s say you want to buy a home but you have unpaid federal taxes and are not aware a federal tax lien has been filed against you. Most lenders will not want to subordinate behind the federal government. So, in the case of purchasing a home you may need to go into a payment plan with the IRS and ask the IRS to subordinate behind a bank lender. It is not impossible but can be challenging. 

How do I find out if a tax lien has been filed? The easiest way to do this is to pull the account transcripts from your IRS.gov account for years you owe taxes for. If you don’t have an IRS.gov account then you can ask a tax professional to request them for you. 

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For more information on how to avoid a tax lien or how to remove a tax lien feel free to give us a call / text / email today. 

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