There are two certainties in life, Death and Taxes.  Although both can be postponed you will pay the price either today or another when your “due date” comes.  Since Death is not a subject of this blog we will focus on Taxes. Liens are the preferred method of Internal Revenue Service (IRS). Therefore, a tax lien is imposed on property by law to secure payment of taxes. Tax liens may be imposed for delinquent taxes owed on real property or personal property, or as a result of failure to pay income taxes or other taxes.

Once a lien is filed, your credit rating may be harmed. You may not be able to get a loan to buy a house or a car, get a new credit card, or sign a lease. Therefore it is important that you work to resolve your tax liability as quickly as possible, before lien-filing becomes necessary.

Here is a very quickly breakdown of the process:

  • 1. They will assess the liability;
  • 2. They will send you a Notice and Demand for Payment - a bill that tells you how much you owe in taxes.
  • 3. If you neglect or refuse to fully pay the debt within 10 days after they notify you about it a lien may be created for the amount of your tax debt.

By filing notice of this lien, your creditors are publicly notified that the IRS has a claim against all your property, including property you acquire after the lien is filed. This notice is used by courts to establish priority in certain situations, such as bankruptcy proceedings or sales of real estate.

The TRUTH is that this is the worst kind of debt to have. Tax Liens have sunk more than a few people for example. We are at that time of year where everyone is thinking taxes. Remember, you might get away with avoiding taxes for a few years but it will catch up to you. If you find yourself in this situation, hire a good accountant.  They are the best ally you have if they know what they are doing. 

Rate this:
2.5
Share and Enjoy:
  • Digg
  • StumbleUpon

If you enjoyed this post, make sure you subscribe to my RSS feed!