A tax lien is usually filed by your state tax agency or by the IRS due to unpaid taxes. Tax liens can be filed on real and personal property, as well as vehicles, alimony, bank securities, etc. A lien filed by the IRS is public information and credit reporting agencies take note of it. It is very essential that you are completely aware of all the factors involved in it.
Tax liens are especially important because they are first position liens. This means that if you sell property that has a tax lienagainst it, then the tax lien will be paid prior to all other liens. It is thus necessary that you make complete attempts to remove tax liens from your property. In order to do this, you must first be fully acquainted with the intricacies of the tax lienconcept. You must understand how the lien was placed on the property and the procedure to remove it.
The impact of tax liens can be considerable. As soon as it is filed by the IRS, all your creditors are notified. This greatly affects your credit report and credit score. It becomes very difficult for you to get any kind of credit extended. However, the IRS has specified four reasons due to which you can remove tax lien from your property. Firstly, you are allowed to remove the lien if you will be able to borrow money for infusing fresh capital into the business. This is advantageous to the government because infusion of capital often translates into profits which can then be used to pay taxes. Secondly, tax liens can be removed if the IRS is ready to settle your debt for a lesser amount and if you are equipped to pay such amount. The third and the fourth reasons occur rarely. The third reason for lien removal can be that the officer who imposed it did so without the approval of his superior. The fourth reason is simply that the government wants the tax liens on you be removed.
Once you obtain approval to get your lien removed, you can either do it yourself or engage an attorney with expertise in negotiating taxes. The disadvantage of doing it yourself is that there is very little chance of getting your tax liability removed. It takes professional experience to achieve mitigation of tax liens. Therefore, engaging a tax relief specialist or attorney is a better option. Tax relief specialists are recommended for contacting and negotiating with the IRS. They can effectively deal with a government agent who can be very intimidating while making demands on the taxpayer. IRS agents tend to be less forceful and more reasonable while dealing with a tax professional. The rates for the services of a tax relief specialist are not high and vary based upon the circumstances. The fees depend on factors such as the type of tax issues you face, whether you are individually applying for it or own a business and the severity of your case.
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