Working The Puzzle From All The Angles

  1. Home
  2.  • 
  3. Tax Law
  4.  • Ignoring a tax lien could have serious consequences

Ignoring a tax lien could have serious consequences

On Behalf of | Dec 30, 2020 | Tax Law

If you have struggled to keep on top of your finances this year, you might feel like ignoring tax demands from the Internal Revenue Service (IRS). However, hiding your head in the sand will only make your problems worse. Failing to respond to the IRS’s demands could lead to a tax lien.

What is a tax lien?

A tax lien is a legal claim the government makes on your property when you owe them money in unpaid taxes.

How will a tax lien affect me?

Tax liens can have several negative effects on your life:

  • It could make it hard or impossible to get further credit from lenders: The government can make the liens public.
  • It could prevent you from selling a property: When you try to sell property, the potential buyer will do a title search. The liens will show up, and they will likely walk away.
  • It could lead to the IRS seizing your property via a tax levy: A tax levy goes one step further than a tax lien. Rather than placing a claim on your assets, the government can take them. They can garnish your wages and freeze your bank accounts.

How can I get a tax lien lifted?

If you accept the IRS’s figures but are unable to pay what you owe straight away, you may be able to arrange a payment plan with them. Or they might agree to an Offer in Compromise, where they let you off with paying a reduced amount. 

There is no easy way to have the IRS lift a tax lien unless you pay what they say you owe. If you disagree with their figures, you could file an appeal. As with the other options, you should seek legal help to do so.