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When you do not, or cannot, pay all the taxes you owe, the IRS might impose a lien on your property, which can complicate your life and finances for as long as it remains active.
A seasoned tax attorney knows how to resolve these liens administratively. Depending on the circumstances, the IRS might lift the lien on certain property or even release it entirely, so ask our Fairfax lien resolution lawyer about the best way to address it.
When you have outstanding tax debt, the IRS can impose a lien. A lien is a security interest in your property, like how a mortgage is a security interest on your home and a car loan is a security interest in your vehicle. You will receive a notice in the mail that the IRS intends to place a tax lien on your property, and it would go into effect in ten days.
An IRS lien can impact any property the taxpayer owns. Real estate, including your family home, cars, boats, and financial accounts are all potentially subject to IRS liens. When someone owes more than $10,000, the IRS may file a Notice of Federal Tax Lien (NFTL) in the county courthouse in the county where the taxpayer lives. This notice typically gives the IRS priority for the proceeds over other creditors when the property is sold.
People without the funds to satisfy their tax debt sometimes ignore the lien until they try to sell or refinance their home, or the IRS gets more aggressive and starts levying a taxpayers assets or income. Contacting a Fairfax attorney immediately upon receipt of the notice of lien can avoid some of these consequences. However, regardless of where you are in the tax collection process, a tax law professional can help you resolve the lien and get some breathing room if your tax bill exceeds $50,000.
You will receive a Collection Due Process (CDP) notice with the notice of intent to file an NFTL. The IRS Office of Appeals, which is independent of the rest of the IRS, oversees the CDP. You can challenge the validity of the lien notice if your Fairfax attorney can show that the IRS violated its procedures when filing it.
You also can use the CDP process to ask that the lien on specific property be lifted. For example, the IRS might discharge a lien from your home so that you can sell or refinance it and remit the equity to the IRS, but would retain its lien on your other property.
Subordination is a strategy that can be helpful in many cases. When the IRS agrees to subordinate its interest in your property, it means that other creditors have priority. That can make it easier for you to obtain a loan or other credit to start making payments on your tax debt.
When the taxpayer meets certain conditions, they can request the IRS withdraw the lien. A Fairfax tax attorney could explain whether a request to withdraw the lien is possible in your circumstances.
When your tax debt is less than $25,000, you may enter a contract with the IRS to pay the amount owing in installments. The installment agreement must provide for full payment of the debt within five years or before the statute of limitations expires, whichever period is shorter. When you have agreed to an installment agreement with the IRS that calls for direct debit of the installment payments, it might agree to withdraw the lien.
Depending on your circumstances, Pontius Tax Law might advise other strategies. For example, if your assets are of limited value and you have no reasonable expectations of being able to pay your tax debt, the IRS might consider an Offer in Compromise, which is an agreement to accept less than the amount you owe. You would still need to pay as much of your debt as you can, and then the IRS would release its lien.
When you do not have the money to pay your taxes, you might be tempted to ignore the issue, but an IRS lien will need to be dealt with eventually. Contact an experienced attorney in Fairfax for help with lien resolution. We can develop a strategy to help you get free of the lien and settle your tax issues. The sooner you get started, the more options you are likely to have. Reach out today.
Pontius Tax Law, PLLC is a tax law firm that strives to resolve sensitive tax problems through trust, dedication and value. The law firm was founded by John Pontius with offices in Washington, DC, Rockville, MD, Bethesda, MD, Fairfax, VA, and Alexandria, VA. Mr. Pontius represents individual and business clients with sensitive and serious tax matters before the Internal Revenue Service and state taxing authorities. His client base is local, national, and international.
Over the course of his career, Mr. Pontius has represented businesses and individuals with complex tax issues in the following areas: FBAR examinations, offshore and domestic disclosures, FATCA, FIRPTA, tax planning, unfiled tax returns, release of tax liens and levies, trust fund recovery penalty, IRS and state audit examinations, as well as appeals, penalty abatement, U.S. Tax Court litigation, along with defense of tax fraud and evasion. If you require assistance from a tax lawyer, contact Mr. Pontius to discuss your situation.
