Tax Lien Removal & Prevention: What to Know | Boxleder Consulting

How Boxelder Consulting Will Help You Prevent and Remove a Tax Lien

Taxpayers with unpaid taxes frequently have federal tax liens filed against them. This is the Internal Revenue Service’s means of ensuring taxpayers keep up to date with their obligations. Federal tax liens are filed with the county government relevant to the area where the taxpayer lives or has registered a business. The official purpose of federal tax lien is to inform the public that a taxpayer has an unpaid federal tax debt and secure the federal government’s interest in that debt. Liens are linked to a taxpayer’s real and personal property.

The lien is binding; when property to which a lien is attached is sold, the IRS gets their share of the cut prior to the taxpayer getting paid. As liens become public record from the moment they are filed, they are automatically accessible to a tax payer’s entire community. This information will affect a taxpayer’s credit score, as tax lien information is often picked up by credit reporting bureaus. Effectively, the IRS just put a giant spotlight on your tax debt for everyone to see.

Understanding the Differences Between Liens and Levies

A tax lien, as opposed to a levy, is filed by the IRS to ensure the government is able to eventually collect the money it is owed. A levy, on the other hand, involves the act of forcefully collecting money from taxpayers, for instance through the confiscation of a taxpayers’ paychecks or bank account.

Effects of A Federal Tax Lien on Credit Score

A federal tax lien guarantees the fall of your credit score. Because the information is made public, it is practically impossible to avoid credit agencies and banks being made aware of your binding debt. This will affect your ability to conduct business, sustain a comfortable lifestyle and even make investments. Re-financing credit is a difficult task and getting approved for a credit card or car lease is almost impossible; just a few reasons why it’s essential to avoid a federal tax lien in the first place.

How Boxelder Consulting May Help You Prevent A Tax Lien

Should you have unpaid taxes, it is natural and somewhat necessary to worry about the possibility of tax liens being filed on your property, or being subjected to an official levy. At Boxelder Consulting, we are dedicated to ensuring that no taxpayer tumbles into the vicious cycle of liens, levies and low credit due to mismanagement of tax liabilities. Our team of licensed professionals will first assess and diagnose the root of your tax problem and then propose a strategic resolution outline to fix the problem altogether. Our no-nonsense approach has made us the allies of Americans in all 50 states, who need to prevent the spreading of cancerous debt cells before any liens or levies are filed.

Whether we have to call the IRS and deal with its intricate bureaucratic processes for you or break down the roots of your tax debt in the simplest of formats, you can trust that our team of trustworthy, credible individuals will strive to prevent your debt from accumulating. Rather than offer a temporary fix, we seek to provide you with a permanent solution.

Common Prevention Strategies

Boxelder Consulting believes that all our clients should be granted the opportunity to deal with their tax mishap before the situation escalates. This type of prevention always begins with forethought – planning ahead before the problem spins out of control. The worst thing a taxpayer can do is wait and hope the problem will go away on it’s own – procrastination only leads to a snowball effect of fines, penalties, liens and levies. If you’re struggling with tax debt, there are several resolution strategies that can protect you from enforced collection activity before it happens.

It’s possible to enter into an Installment Agreement with the IRS – if accepted, the taxpayer is granted the opportunity to pay off tax debt in small monthly payments. Though this process is relatively complex, Boxelder Consulting has decades of experience filing the required paperwork and negotiating directly with the IRS on your behalf.  Our tax experts will streamline the process while ensuring your rights as a taxpayer are protected. Hiring a team of licensed professionals to handle your tax issues will ultimately save you valuable time and money in the long run.

While this may seem relatively hard to wrap your head around, Boxelder, unlike the IRS, does not consider you a mere file number in their systems. Boxelder Consulting believes in the power of second chances and that each client is a real human being who deserves the opportunity at freedom from tax debt.

The Lien is Filed: How Can Boxelder Help?

Tax Liens affect your credit and reputation; removal of these liens in a timely fashion will provide an immediate and tangible benefit to your business including lower interest rates and a higher credit rating. If you know where to start, there are several ways to remove a tax lien – the most common methods are via appeal, withdrawal, or release.

Once the IRS has filed a lien with the county, the affected taxpayer will receive a Notice of Federal Tax Lien which alerts creditors that the government has a legal right to your property. The lien will officially take effect exactly 10 days after the IRS has issued its demand for payment of outstanding taxes. This leaves the affected taxpayer very little time to stop the impending collection actions. At this point, seeking professional help to resolve the matter is an absolute must.

How to Remove a Pre-existing Lien

Federal tax liens can be removed when the outstanding balance is paid in full or otherwise satisfied through a successful compromise with the IRS. This is where our skilled, experienced professionals come in: their negotiation skills and vast experience in the field will guarantee you your best chance at an IRS deal that will favor you most.

If you believe that the lien was placed due to an error, you have the option to appeal. If this is the case, the IRS will remove a federal tax lien only if you can prove that it was done erroneously.

Additionally, a lien withdrawal is a possible option for taxpayers who meet one of the following criterion: (1) the lien is completely paid off (2) the lien was filed falsely, or (3) you’ve qualified for the Fresh Start Initiative with a liability lower than $25,000. If you fall into one of these three categories, you’ll want to take proactive steps upon receiving the lien notice in the mail and file Form 12277, Application for the Withdrawal of Filed Form 668.

A lien release is another common resolution strategy to get rid of a pre-existing lien. A lien release is similar to a withdrawal, however, a tax lien release is issued when a taxpayer repays the full obligation after the lien has already been placed on his or her account. Once your debt has been paid in full, or you’ve arranged a streamlined installment agreement, the IRS is obligated to release the lien after 30 days.

How to Remove a Lien from Your Credit Report

After you’ve had the tax lien removed, either through withdrawal or release, you’ll want to take the initiative to contact the three credit agencies to make sure your credit report is updated accordingly. Tax liens can tarnish your credit history for years to come, which can ultimately affect whether or not you receive loans, mortgages, and other life necessities.

Tax Liens Are Static: A Real Life Example

The balance due on your Federal Tax Lien never changes, even if you have made significant progress paying it off. For example, a recent new client to Boxelder Consulting came to us with a tax lien showing a balance due of over $74,000, but this debt accrued in 2012. Our team immediately noticed a big difference in the balance due when tagged in – the taxpayer owed less that $50,000 once we were done negotiating with the IRS. The Boxelder team was able to enroll this client into the Fresh Start program and immediately pursue a withdrawal of the lien. We were successful in not only securing a new, lower monthly payment amount, but secured the withdrawal of the lien that had an outdated balance. The same client was able to secure a mortgage loan shortly thereafter. Real results, with real people.

Why Hire Boxelder?

It is very normal to be stressed about working with the IRS, or confused about the extent of your debt, or how to settle it. Boxelder seeks to make the situation infinitely simpler for you by drawing your path to a debt-free life and supporting you through all stages from start to finish. Should you or a loved one be dealing with tax troubles, contact us today to embark on a comfortable journey to financial serenity. We believe in second chances, start your comeback story today!

Group 28 Created with Sketch.

About the Author

A company founder standing by Colorado's Front Range

Tom Conradt

Co-Founder, IRS Collections Defense Attorney

Tom Conradt is the co-founder of Boxelder Consulting & Tax Relief, and has been practicing IRS Collections defense law for the past ten years. Graduating from the University of North Carolina at Chapel Hill, Tom is the lead IRS Collections Defense Attorney and heads the tax resolution department. Tom’s favorite part about working at Boxelder Consulting is hearing about the relief that clients experience after they sign up and start seeing immediate results on their case. Tom enjoys all the outdoor activities Colorado has to offer, including skiing, hiking and climbing. He is also looking forward to the return of indoor pickup basketball.

Group 28 Created with Sketch.

Take the Next Step

Get a free, no strings attached, thorough analysis of your tax liabilities.

Request a Consultation