Understanding a Tax Lien from the Core

A federal Tax lien is the claim made by the government against the taxpayer’s property when he/she fails to pay the total amount of tax debt.

This tax lien is a protection for government in all the property you own.

This property can be real estate, personal residences or any kind of financial assets.

The Internal Revenue Service (IRS) files a warning of the federal Tax Lien to warn the creditors that the government has legal rights over their properties or financial assets.

This process takes place when the IRS:

  • Examines your liability.
  • Sends the creditor a notice of the bills showing how much tax is owed (Notice and Demand of payment)

 

How to Avoid a Tax Lien or Ger Rid of it completely?

Firstly, avoid owing any tax to the IRS. Pay your taxes in full.  Your lien will be released within the 30 days of tax debt payment by the IRS.

Discharge of Property:

A ‘discharge’ gets rid of the lien from a specific piece of property you own. According to codes set by the IRS, the eligibility is determined.

Subordination:

Subordination will not remove the lien. It will only allow other creditors to move ahead easily. This option helps in getting a loan or mortgages much easily although eligibility is still required.

Withdrawal:

The withdrawal ensures that the IRS is not competing with other creditors for the property you own and it helps remove the public Notice of Federal Tax Lien.

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By |2016-02-19T18:32:44+00:00February 19th, 2016|Blog|0 Comments

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