A federal tax lien can hurt the ability a person has to get credit or to sell their home. If someone is already dealing with delinquent IRS tax debt, the addition of a tax lien can put them in an even more difficult financial position.
While this is true, there are a few ways to handle the situation. It is possible to learn about the options at Brotman Law, or to keep reading. Consider some of the strategies if someone needs to get a loan, refinance a loan, or to sell an asset that they have.
Understanding the options that are available is the best way to handle a tax lien, regardless of how much it is for or what the situation is. Being informed is the first step that a person should take. Keep the tips and information below in mind to minimize issues and handle the situation.
Pay the Amount in Full
The simplest solution for this is also often the hardest. It is to pay the tax debt that is owed in full. The IRS should be able to release the lien within about 30 days after the tax debt has been repaid. However, sometimes, the lien can hurt a person’s credit, which is going to make it even more challenging to get the loan needed to pay off the balance in full.
Subordinate the Tax Lien
Every security interest that is in an asset as a spot in the repayment line. For example, the main mortgage lender will be usually going to be first in this line, which is then followed by the tax lien from the IRS. When a lien subordination is used, it means that the IRS is taking a step back in the line to be repaid. Sometimes, it is possible to get this if certain conditions are met. The IRS will provide more information on the specifics of the requirements.
Discharge the IRS Lien
With a lien discharge, it is possible to complete remove the federal tax lien from the asset. If someone wants to sell the asset, they have to have it discharged, rather than the subordination.
Similar to a subordination, the discharge requires that a person repay the IRS the money that is owed or to help them feel more secure about the interest they have in a person’s property. If the property a person has is worth twice as much as the lien amount, which is what is owed to the IRS, the IRS could consider discharging the lien from one of a person’s assets.
Direct Debit Installment Agreements
The IRS prefers DDIA – Direct Debit Installment Agreements, because the taxpayers do not have to worry about sending in a check every month. There are some taxpayers who can use the DDIA who will also qualify for a withdrawal of the lien.
If someone owes more than $25K in tax debt, they must pay the balance down under this amount first. They will also have to meet specific, other conditions, like making a minimum of three direct debit payments consecutively.
Challenge the Lien
In some situations, the IRS will get a bit overzealous when it comes to filing a lien. For example, the lien may be filed before the proper notices are provided to a taxpayer. In these situations, it is possible to have the line withdrawn because of procedural errors or because of a specific violation of the IRS policy. Make sure to offer some type of tax resolution since the IRS may make the decision to file an all new, valid tax lien.
Hire a Tax Attorney for Help with the Situation
When it comes to dealing with a tax lien, there is no question the process can be complicated and frustrating at times. It is essential that a person has help with this process. One of the best ways to get this help is by hiring an experienced attorney. They can review the situation that a person is in and begin to come up with solutions that will satisfy their needs.
Remember, tax liens can impact a person in many ways -; not just their financial peace of mind. By handling the situation with one of the options above, it is possible to reduce the stress of the situation and get back on even footing. Take some time to review the information here and find an attorney with experience with these types of situations. This is going to be the best way to handle what is going on.
How to Find the Right Attorney for the Situation
When it comes to hiring an attorney for dealing with a tax lien, there are more than a few factors to consider. For example, it is necessary to think about how much prior experience they have in this field and how many similar cases they have handled. It is also a good idea to get recommendations. This is a smart way to get to know some of the top options in the area -; which is a crucial element in choose an attorney.
Do not underestimate the impact of a tax lien. As more time passes the situation is only going to get more complicated. The best option is to face the situation and deal with it. Doing this is going to help resolve the issue and ensure that no more serious problems like this occur again in the future. While there are no guarantees, the help of an attorney will provide the biggest benefits possible.
Remember, each individual has a unique situation. Knowing the details of the situation and hiring a professional tax attorney will pay off. While this is another expense for the individual, it is one that is well worth making. Keep this in mind and take the right steps to reduce the issues that a person faces now and in the future. There is no reason to try to handle this situation alone. Being informed is the best way to handle this situation regardless of how much is owed.