When the IRS issues a federal tax lien on any property you owe due to an unsatisfied tax debt, you do have options in dealing with this issue. The lien itself does not entitle the IRS to seize your assets directly, however if the lien goes unresolved this will, in most cases, result in the IRS issuing a tax levy on your property and seizing it for resale to cover your tax debt. However, you can deal with this lien issue in a number of ways.
Your Options for Dealing with a Federal Tax Lien
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Take No Action
By relying on the fact that there is a statute of limitations regarding the IRS tax lien ordinances, you can simply do nothing while waiting for the period of time the IRS has (under normal circumstances this is a period of 10 years) to collect the amount of taxes owed, from the date of assessment. However, this action is considered of the highest risk, because if the levy is issued within the statute’s limitations, the IRS has the right to take your assets in an attempt to receive what you owe them.
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Pay the Amount Owed
Though it’s not your only option in these circumstances, paying the entire debt that you are responsible for is your best option for getting a federal tax lien released. You need to make sure that all of the debt you are responsible for has been accurately assigned to you, but once this is confirmed and the debt is paid, the lien will be released and the IRS will have no right to any of your property.
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Apply for a Payment Plan
In most cases, unless the debt is grossly overdue, the IRS will be more than willing to arrange a payment schedule with you. This is typically referred to as an installment agreement. This allows you to pay down your debt and resolve the issue without having to come up with the entire debt all at once. However, the lien on your property will not be released until the IRS confirms your responsibility to the debt has been satisfied.
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Make an Offer In Compromise
Filing for an offer in compromise will generally release you from the tax lien upon acceptance of the offer made. In most cases, an offer in compromise will allow you to satisfy your debt for a fraction of the entire debt amount. However, you will have the responsibility of proving that the amount you’ve offered in compromise is either equal or greater to the entire amount the IRS would collect should they enforce their lien and levy rights.
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Appeal
You can also appeal the lien that has been filed against you in an attempt to prove that the lien has been applied unjustly or without warrant. If you decide to pursue this option, you first need to consider consulting with an experienced tax lawyer.
Getting Help
Because you have a variety of options available to you when you are faced with a federal tax lien, it is important to speak with a qualified and experienced tax attorney. Your lawyer can help you decide what course of action is the best way for you to get the tax lien released from your property.
