Protect Your Assets with the Help of an Experienced Texas Tax Lien Attorney
In recent years, the Internal Revenue Service (IRS) has become more aggressive in using tax liens to secure payment from delinquent taxpayers. While tax liens are an effective collection mechanism for the IRS, having an IRS tax lien placed on your personal or business property can have consequences far beyond those related to your (or your business’s) tax liability. As a result, it is important to avoid IRS tax liens if at all possible, and if you are currently dealing with a lien, you will want to hire an experienced Texas tax lien attorney to help you find the best path forward.
What Is an IRS Tax Lien?
An IRS tax lien is a formal civil tax claim against your (or your business’s) property—or even against your business as a whole. While a lien does not result in the immediate seizure of the subject property, selling the property will give the IRS the ability to collect on your (or your business’s) tax debt from the sale proceeds. The IRS can place tax liens on all types of assets—including (but not limited to):
- Business ownership interests
- Business equipment and inventory
- Real estate (including primary residences, vacation homes and commercial properties)
- Vehicles (for both personal and business use)
- Investment accounts and other high-value assets
How Can an IRS Tax Lien Affect You (or Your Business)?
An IRS tax lien can affect you (or your business) in several ways. As noted above, selling an asset that is subject to a tax lien allows the IRS to collect from the proceeds (by executing a levy on the proceeds). But, as a practical matter, having a tax lien on your property can prevent you from selling the property until you have the lien released. Other consequences of IRS tax liens for individuals and businesses include:
- Adverse Credit Consequences – Having a Notice of Federal Tax Lien filed against your (or your business’s) property can negatively impact your access to credit.
- Non-Discharge in Bankruptcy – While some tax debts can be eliminated through bankruptcy filings, once the IRS issues a Notice of Federal Tax Lien, the lien will generally survive the bankruptcy process.
- Attachment of Future–Acquired Assets – An IRS tax lien can attach to future-acquired assets for the duration of the lien. For businesses, this includes accounts receivable.
How Can You Avoid an IRS Tax Lien?
As the IRS explains, “[y]ou can avoid a federal tax lien by simply filing and paying all your taxes in full and on time.” Of course, for many individuals and businesses, this is easier said than done. If you cannot afford to pay what you owe, a Texas tax lien attorney may also be able to help you avoid an IRS lien by:
- Submitting an offer in compromise
- Negotiating an installment agreement
- Seeking interest abatement or penalty relief to reduce your IRS debt to a manageable amount
- Seeking currently-not-collectible status
- Challenging the IRS’ determination of your liability through an IRS appeal
How Can You Get Rid of an IRS Tax Lien?
What if it is already too late to avoid an IRS tax lien? If you are currently dealing with an IRS tax lien, you should consult with a Texas tax lien attorney about your options for having the lien lifted or removed. Depending on your (or your business’s) circumstances, these options may include:
Applying for a Certificate of Discharge
Applying for a Certificate of Discharge allows you to have one or more specific assets taken out from under (or “discharged” from) the IRS’ tax lien. Applying for a Certificate of Discharge is a complicated process, and it is important to make sure that this is your best option before submitting any information to the IRS. Our attorneys can determine if it makes sense for you to seek a Certificate of Discharge, and if so, our attorneys can prepare and prosecute your application on your behalf.
Filing for Withdrawal
While applying for a Certificate of Discharge allows you to get certain assets out from under an IRS tax lien, filing for withdrawal allows you to have the lien eliminated entirely. If you successfully file for withdrawal, this “removes the public Notice of Federal Tax Lien and assures that the IRS is not competing with other creditors for your property.” However, as the IRS also notes, “you are still liable for the amount due.” As a result, in many cases, taxpayers who file for withdrawal will also file for other forms of tax relief, such as an offer in compromise, installment agreement or currently-not-collectible status.
Paying Your Tax Debt
Of course, if you are able to do so, paying your (or your business’s) tax debt will result in the elimination of the IRS’ tax lien. The IRS releases liens within 30 days of full payment. But, while this might be your best option if you can afford it, you may still want to consult with a Texas tax lien attorney to see if you are eligible to reduce your tax debt or if you have grounds to file an appeal.
Apply for a Certificate of Subordination
Applying for a Certificate of Subordination does not eliminate an IRS tax lien, but it allows you (or your business) to pay other debts in order to avoid repossession, foreclosure or other collection action. In some cases, applying for a Certificate of Subordination may also allow you to get a loan that you can use to pay off your tax debt or other liabilities. Here, too, it is important to proceed carefully and make informed decisions, so it is best to have an experienced Texas tax lien attorney on your side.
Speak with a Texas Tax Lien Attorney at Brown Tax, P.C. in Confidence
If you need to know more about avoiding or removing an IRS tax lien, we invite you to get in touch. One of our attorneys will be happy to meet with you one-on-one to go over the options you have available. To schedule a confidential consultation at Brown Tax, P.C., please call 888-870-0025 or inquire online today.