A federal tax lien is the federal government’s legal claim to the property of a taxpayer who owes the IRS. The tax lien secures federal interest in a taxpayer’s property, from financial assets to real estate and other personal property.
Federal tax liens are public records that alert creditors the government has a legal right to a delinquent taxpayer’s property.
How Do You Search a Federal Tax Lien?
The IRS files the Notice of Federal Tax Lien with the secretary of state, county clerk, or state recorder’s office to secure your tax debt. The following are some of the ways to look up a tax lien:
|State Recorder’s Office
|The recorder’s office in your home county or state is the first place to search a federal tax lien. The state recorder’s office offers an online index of recorded documents. You can run an online search to determine whether you have a federal tax lien. Search by name, document number, or Assessor’s Parcel Number (APN).
|Secretary of State’s Website
|It is also possible to search for a federal tax lien on your secretary of state’s website. Search “tax lien filings” or “UCC” on the website. When prompted, enter required fields, including your name and filing number.
|Alternatively, you can find out if there is a lien on your property by contacting the agency’s Centralized Lien Unit at (800) 913-6050.
|Leverage Legal Databases
|Finally, you can leverage the services of private third parties that provide online public records searches.
How Does a Federal Tax Lien Affect You?
If you have a federal tax lien against your property, you must resolve it as quickly as possible. A federal tax lien can affect:
|You can lose physical property, including cars and homes. Additionally, federal tax liens may result in wage garnishments and levies of your bank accounts and retirement funds.
|A notice of a federal tax lien can limit you from getting credit.
|Loss of Business
|A federal tax lien can include your business property, meaning you will lose all rights to your business property, like accounts receivables.
|Your notice of federal tax lien and tax debts will still exist even after filing for bankruptcy.
How Do You Remove a Federal Tax Lien?
The following are five effective ways to remove a federal tax lien:
|1. Pay Tax Debt
|The best way to remove a federal tax lien is to pay the full tax debt amount you owe the IRS. The IRS will release a lien on your property within 30 days after you settle your tax debt.
|2. Tax Relief
|The IRS offers several relief tax relief options to help taxpayers resolve their tax issues with the agency, including monthly payment plans and long-term installment agreements, Offer in Compromise, and Currently Not Collectible status. Start here to see how we can help.
|A discharge means the IRS removes the federal tax lien from your property so that you can transfer the property without a tax lien attached. The IRS provides specific Internal Revenue Code (IRC) provisions for discharge eligibility. Contact a tax expert to learn how to apply for federal tax lien discharge.
|Subordination means the IRS allows another creditor to be paid before your federal tax lien. Subordination does not remove a lien from the property; instead, it allows one of your creditors to move up the priority list and get paid before the IRS. Subordination makes it easier for you to get a loan or mortgage.
|An IRS withdrawal removes the public Notice of Federal Tax Lien. However, even when you have a withdrawal, you are still expected to pay the full amount of your tax debt. General eligibility for withdrawal includes: You have entered into a direct debit installment agreement with the IRS or your taxes have been paid and the federal tax lien released.
Who Can I Contact About Federal Tax Liens?
If you need more information about your federal tax lien, you can contact several entities with adequate resources to help. These include:
|Centralized Lien Operation
|CLO can help resolve basic tax lien issues such as verification of federal tax lien, request tax lien payoff amount, and more.
|Collection Advisory Group
|Collection Advisory Group can help with more complicated issues such as discharge, subordination, or withdrawal.
|Office of Appeals
|You have a right to appeal/dispute a Notice of Federal Tax Lien with the Office of Appeals.
|Taxpayer Advocate Service
|If you need help from a trustworthy independent entity within the IRS, contact the Taxpayer Advocate Service.
|Centralized Insolvency Operation
|You can connect with the Centralized Insolvency Operation to determine if bankruptcy affects your tax debt situation.
|You can also contact the IRS directly for answers to your federal tax lien questions.
Avoid a Federal Tax Lien Today
The easiest way to avoid a federal tax lien is to file your tax returns on time and pay any taxes you owe the IRS. If you cannot, there are tax relief services for you to be able to pay your tax debt in monthly payments or even settle your tax debt for less with an Offer in Compromise (OIC). You may qualify for an IRS Payment Plan or OIC with the Fresh Start Program.
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