Failing to pay your federal taxes in a timely manner can result in serious repercussions. The IRS could impose collection actions in the form of a federal tax lien. If you’re at risk of incurring a federal tax lien due to unpaid tax debts and tax bills, it’s important to understand what a tax lien is and how you can resolve your tax lien problem with the assistance of a tax professional.
A tax lien refers to a legal claim to a person’s or a businesses’ real estate or personal property, that can be filed by a government body or the Internal Revenue Service when a person fails to pay one of a range of taxes, such as income tax, estate tax, or taxes on belongings. If payments are not imminent when the taxpayer receives a Notice and Demand for Payment, the next course of action imposed by the government could be placing a tax lien against your property. Such claims can be imposed by either the state or federal government. If a person attempts to sell the property, the sales proceeds, up to the amount of the tax listed on the tax lien, will be sent to the government.
What Is A State Tax Lien?
As the name suggests, a state tax lien is implemented by the state government, enabling the state government to exercise a legal right over the property of the taxpayer, with the aim of securing the tax that is owed. Before this action is taken, a Notice of State Tax Lien is issued. Depending on the assets owned by the debtor, the tax lien can apply to real estate or personal property. The lien remains on the property in question until an appropriate resolution is reached and owed taxes have been settled.
Before the issuance of either the Notice of Federal Tax Lien or the Notice of State Tax Lien, a series of steps will be taken by the government. Firstly, a Notice of Assessed Tax or a Bill for Taxes Due or a Final Bill for Taxes Due will be sent to the taxpayer. The individual will be given a waiting period, in most cases usually approximately 35 days, to settle the tax debt, or make an arrangement to pay the tax before the Notice of Federal Tax Lien or Notice of State Lien is issued.
How to get it removed?
A tax lien is the first step the IRS or state taxing authority takes to recover back taxes. Once a tax levy is imposed, the government can potentially freeze bank accounts, seize property and assets, as well as garnish wages. Fortunately, there are several methods of removing a federal or state tax lien.
Firstly, states impose limitations on how long a lien is valid. As the rules vary widely by state, speaking to a tax professional is extremely important when trying to avoid wage garnishments or property seizures.
Secondly, although a taxpayer can negotiate with the IRS or state government on his or her own, with the purpose of discussing the possibility of settling unpaid taxes, a tax professional can be of great assistance to you in reaching a more favorable settlement with the government through the arbitration, mediation, or informal discussions processes.
Coast One Tax Group – Your tax defense team
Coast One Tax Group supports individual taxpayers, small businesses, and corporations in resolving tax lien and tax levy problems. Whether the lien is imposed by the state or federal government, we have the best team available, with years of experience, to help you to protect your assets.
A Federal or State tax liens is the first step in seizing property and funds. One can lose personal property and wages once a tax lien turns into a levy. If the IRS or state government notifies you of a tax lien, you must act immediately.
Contact us at Coast One Tax Group to discuss your situation and details of your state tax lien. Our team of tax experts are ready to help you deal with your tax issues with the smoothest methods possible.