How Federal Tax Liens Work

The United States Tax Code is long and confusing, and simply paying your taxes is easier said than done. Thousands of Americans each year find themselves unable to pay the taxes they owe by year’s end. While it’s easy to ignore the taxes you owe and go on living your life, eventually you will be hit with a federal tax lien. If you have been notified by the IRS that a federal tax lien has been filed in your name, you should start seeking tax debt relief in Los Angeles to avoid the consequences of this lien. 


When a federal tax lien is filed, all of your real and personal property are marked. If you attempt to sell any of your property, the IRS will collect the money they are owed from the sale before giving you what’s left over, if anything. This means if you sell a personal car for $12,000, but owe more than $12,000 in taxes, the IRS will take all of the proceeds of the sale and put it towards your debt.

Public Record

When a federal tax lien is filed in your name, it becomes a matter of public record in your county. This means that any curious individuals or organizations could look up your public record and see that you have unpaid taxes, including credit reporting bureaus. This means that your credit score can be negatively impacted by a lien for years to come.

Releasing a Lien

To have a federal lien released, so that it will no longer encumber your property, you need to settle the debt. You can either do this by paying off the debt completely, or by arranging a payment plan with the IRS. Once a lien is released, it will still appear on your credit report for up to 10 years.

Withdrawing a Lien

One of the biggest advantages to hiring an attorney for tax debt relief in Los Angeles is that sometimes a lien can be withdrawn. When a lien is withdrawn it is as if it were never filed in the first place, so your credit report won’t be impacted. If you can show that the lien was filed in error or you are able to meet certain criteria, you may be able to get a withdrawal.