IRS Liens

IRS liens so I want to talk briefly about IRS liens IRS lien or lean in general is a security interest in a piece of property so an IRS lien it represents the government's interest in the personal and real property of a taxpayer a tax lien has the effect of attaching to all the taxpayers real and personal assets and in the event of the taxpayer goes to sell one of those assets the government it has a claim to that money now in actuality liens really serve two purposes number one they attach to property and make it really difficult to sell houses and occasionally it can make it really difficult to sell vehicles or larger items of personal property to believe those that are registered with the DMV and secondly it leans have a very negative impact on a taxpayer's credit and their ability to borrow now the officially the policy statement from the IRS is that liens are used to preserve the government's interest but there is a big debate between. The IRS and the tax practitioner community on what the efficacy of liens are particularly where a taxpayer doesn't have any assets for the government to secure because the government likes to say that leaves are a necessary measure of preserving a security interest we would argue that the liens are a punitive measure that really only impacts a taxpayer's credit particularly you have a case where taxpayer has entered into installment agreement that will full pay a liability and the IRS goes and files lien anyway that is a particularly hot topic of debate, but an IRS tax lien can be dealt with in one of three ways you can withdraw you can ask the government to withdraw the lien meaning that the gleam effectively never happened and will completely disappear from a tax payers credit the government can release.

The lien usually after the liability has been paid at fault or the tax the government can subordinate a lien which means it drops the lien in priority to perhaps another lender so if there is a refi for a house for example and the lender wants the government drop its interest you apply for a subordination out of those three options the best option is to withdraw the withdraw takes the lien off the taxpayers credit it basically pretends that it never happened and it moves it forward from there the way to apply for early withdrawal is through these through the technical advisory unit of the IRS it is usually a pretty detailed process and there are some criteria for a meme withdrawal so if the lien serves the best interest of the taxpayer and the government the IRS can withdraw the lien if the taxpayer is on a valid installment agreement that will full pay the liability the IRS has the discretion to withdraw galine for lean issues we recommend generally getting a tax representative involved because they can be fairly technical and because the pitfalls that you have to navigate but I do want you to be aware that there are several options for dealing with tax liens it's not an entirely gloom and doom situation and that there are numerous options for kind of navigating around them in particular you're going to want to be particularly aware when you set up resolution off of options such as installment agreements that you do so with the intent of avoiding liens liens are never a good thing they can impact a taxpayer far beyond the duration of their liability and oftentimes when speaking with clients it's not the resolution that's causing the taxpayer problems it's the threat of lean this liens prevent people from buying houses and moving on with their life and funding their business and so are never really a good thing to consider.

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Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law

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