24 Jun 19 Audra Walter
Some things are easy to talk about, IRS tax debt not so much. For most people, opening up to family or friends about their financial problems with tax debt owed to the IRS is as personal and potentially embarrassing as it gets. We don’t know exactly why this is the case, we just know that it is the case and we understand what causes our prospective clients to go into “bunker mode” when faced with this daunting issue.
For some people, this may be because IRS tax debt represents a kind of failure in their eyes, or at least a form of irresponsibility. For others, the reason may be entirely different. Although talking about it is usually tough, it’s important that you open up about and confront this issue directly. And the reason for this is simple: when it comes to IRS tax debt, the worst thing you can do is avoid it. Tax debt doesn’t go away. And if you let it fester, you can end up placing yourself in a much worse off situation than you would be otherwise.What you don’t know can hurt you. Thankfully, all it takes it one call to turn it all around. The relief our prospective clients feel after just a brief initial consultation is frequently described as “life changing”. One day, you decide to leave the bunker and you find that rather than disaster, the sky is blue and the birds are chirping.
In this post, we will go over the basics of federal tax liens. We will cover the nuts and bolts of these liens and discuss the mechanics of how they are issued by the IRS. We hope that you’ll be better able to avoid a federal tax lien if you have an understanding of what these things are and how they work. If you get stuck with a federal tax lien, it’s critical that you reach out to a qualified tax professional to get a grip on the situation. Again, we know how tough this can be. But if you want to prevent your property from being taken, you need get the lien removed. The tax professionals at Boxelder Consulting have lots of experience dealing with liens and are available to help. We understand all of the difficulties involved with opening up about this issue. Give us a call at 303-317-6111 for more information. We believe in second chances. Start your comeback story today.
The Nuts & Bolts of Federal Tax Liens
A federal tax lien is a legal claim against your property. The IRS will issue a lien when you either neglect or fail to satisfy a tax obligation. With a tax lien, the IRS is stating that it is preparing to take your property through force in order to resolve the debt. By issuing the lien, the IRS is letting other creditors know that it has priority over your property. In other words, the IRS is signaling that it is “first in line” when it comes to having the right to seize your property.
The IRS can seize almost any type of property you have in order to take care of your back tax debt. This means real estate, stocks, bonds, cash, cash equivalents and other kinds of property. If you want to keep these kinds of property, you need to reach out if you receive a federal tax lien.
The Federal Tax Lien Process
As with a levy, the IRS will follow a certain procedure when it comes to dealing with tax liens. For an overview, see Publication 594 regarding the IRS Collection Process. The first thing the IRS has to do is assess your tax debt. After making an assessment, the IRS will then send you a notice that you owe back taxes. This notice is referred to as a Notice and Demand for Payment. Essentially, this is the IRS sending you a bill to let you know that you owe a balance. Then, if you fail to take care of the bill, the IRS can issue a document to notify other creditor’s regarding its legal claim against your property. This document is formally known as the Notice of Federal Tax Lien. If you don’t remove your lien, the IRS can eventually seize and sell your property to satisfy the tax debt.
Technically, a lien is created against your property automatically when you neglect or fail to satisfy your tax obligation with the IRS. The Notice of Federal Tax Lien is the IRS acting on this lien and making a step toward using this lien to satisfy your debt. The IRS doesn’t want other creditors to step in before it has its own opportunity to seize your property. In other words, the notice doesn’t technically create the lien, it simply stands as evidence that the IRS may actually use this lien to seize your property. The IRS has limited resources, and so it will only focus on those cases which have a high likelihood of providing a good return.
Don’t Hesitate to Contact Us
These are just the basics. In one of our future posts, we will go over your options for removing a federal tax lien. Removing a federal tax lien is extremely important. Not only can these liens result in the taking of your property, they can also adversely affect your credit report. This means you’ll have a harder time obtaining loans, and the loans you do obtain will have higher interest rates.
The good news is that resolving a federal tax lien is less difficult than you might think. You have a variety of options to choose from. But, as we mentioned, the biggest hurdle is making the first move. And this can be tough because almost everybody has trouble opening up about this type of thing. This is why it’s critical that you find a tax professional you can trust. The professionals at Boxelder Consulting are here to help. We will walk you through the process, step by step, and help you get back on track financially. Reach out to us today to begin rebuilding your future. We can be reached at 303-317-6111. We look forward to assisting you.
We believe in second chances. Start your comeback story today.