IRS Lien

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Tax Problems

An IRS tax lien is a legal claim against your property that protects the government’s interest in your assets. Federal tax liens can damage your credit, make it difficult to sell property, and create problems for your business. Understanding your options for addressing liens is essential to protecting your financial future.

What is a Federal Tax Lien?

A federal tax lien arises automatically when you owe taxes, the IRS assesses the liability, sends you a bill, and you fail to pay in full. The lien attaches to all your property—real estate, personal property, and financial assets. It also attaches to property you acquire after the lien arises.

Notice of Federal Tax Lien

While the lien itself arises automatically, the IRS must file a Notice of Federal Tax Lien (NFTL) to establish priority against other creditors and make the lien public record. This public filing damages your credit score and alerts others to your tax debt. The IRS generally sends notice before filing, giving you an opportunity to pay or make arrangements.

How Tax Liens Affect You

Federal tax liens significantly impact your financial life. They appear on credit reports and lower your credit score. They create complications when selling real estate because the lien must be addressed at closing. They can affect your ability to get loans or credit. For business owners, liens can interfere with obtaining contracts or financing.

Options for Addressing IRS Liens

Lien release occurs when you pay your tax debt in full or it becomes legally unenforceable. The IRS must release the lien within 30 days of full payment. Lien withdrawal removes the public notice as if it was never filed—this may be available if the lien was filed prematurely or you enter a direct debit installment agreement.
Lien subordination allows a specific creditor to move ahead of the IRS lien, helping you refinance property or obtain financing. Lien discharge removes the lien from specific property, allowing you to sell that property while the lien remains attached to other assets.
If the IRS has filed a lien against you and you want to understand your options, contact Boss Tax Law today.