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Did You Receive a Federal Tax Lien By Mistake?

Friday, September 4, 2015

Federal tax liens are to be taken very seriously. These tax liens can damage credit scores, prevent real estate closings, and cause other serious problems in your life. The purpose of a tax lien is to make sure that the Internal Revenue Service receives their money.  They don’t care if you pay in one lump sum or if you negotiate for a payment plan with installments. The point is they are very serious about getting their tax money. 

The IRS is usually correct when issuing federal tax liens, but there are cases of mistakes.  Even if you fully pay off a lien, there is a chance that the lien may not be removed due to a mistake. These may be complications if you didn’t anticipate, especially if you didn’t know there was a tax lien filed against you.  There are always some lien notices that are mismanaged.  Actually, according to a report issued by IRS auditors, over 24,000 taxpayers may have been negatively affected by tax liens that the IRS botched.  In most of these cases, the IRS mailed out lien notices that explained the taxpayer’s appeal rights, which is the correct procedures if a notice is undeliverable by the post office.

However, 24,000 taxpayers is a significant amount that were affected by the IRS’ tax lien errors.  Even if you have a tax attorney or tax accountant, mistakes can still happen. In general, the IRS can file a Notice of Federal Tax Lien if (1) the IRS assesses the tax liability; (2) the IRS sends a Notice and Demand for Payment; and (3) the taxpayer fails to pay within 10 days.

In general, the IRS need to file a notice of lien so that creditors are aware of the situation. These tax liens cover all assets and property and it won’t make a difference if the property was acquired after the filing of the lien. Many times, this information is used for real estate auctions and bankruptcy proceedings.  The liens will usually last 10 years and unless the IRS refiles them, it will release automatically.  

As top tax attorneys in Los Angeles at the Strategic Tax Lawyers firm, we recommend that you remove tax liens immediately, and we can assist you throughout the process.  In general, a lien will be released if a taxpayer will (1) pay the tax and the interest and penalties associated with it or (2) post a bond that for a payment.  

The Strategic Tax Lawyers, LLP are a firm of professional and qualified California Tax Attorneys, Intent to Levy attorney and Tax Relief attorneys who specialize in all aspects of the tax code, especially federal tax liens.  Our firm has years of experience dealing with the IRS about tax-related issues.  To get a free consultation, call the Strategic Tax Lawyers at (800) 669-4775 for assistance you with your tax-related matters.