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Do Not Ignore an IRS Property Lien

Do Not Ignore an IRS Property Lien

If the Internal Revenue Service (IRS)1 believes that you owe unpaid taxes, the agency has several different methods of trying to collect that debt. One of the most aggressive collection methods commonly used by the IRS is by placing a federal tax lien on property that you own.

What is a Property Lien?

A lien is a legal tool that creditors and government officials can use to ensure they eventually receive payment of a debt. Liens can be filed against property that you own and, if you are not selling your property, you may feel no effects of the lien for awhile. However, once the time comes to refinance or sell your property, the IRS will be able to collect that lien from the proceeds of the sale.

Negative Consequences of a Lien

When you decide to sell your home, a lien can cause many issues. First, it may be difficult to complete a sale because the title to your home is not clean. Even if you do complete the sale, you may still be left with financial debts. Imagine the following:

  • The IRS files a lien for $20,000
  • You have $200,000 left on your mortgage
  • You sell your house for $210,000
  • The IRS collects the $20,000 from the proceeds first
  • Your bank only gets $190,000 and you will be left with a $10,000 debt to the bank

Finally, a tax lien can highly affect your credit score, making it difficult to get approved for new financing for anything. For all of these reasons, you should always call an attorney about a tax lien instead of ignoring the problem.

Consult with an IRS Collection Appeals Lawyer for Assistance Today

If the IRS is using liens, levies, or other collection methods, your household’s financial future may be in jeopardy. Ignoring the matter can only make it worse–instead, you should contact an experienced IRS lien release attorney as soon as possible. At Attorneys Tax Relief, we help clients in the Chicago area and throughout the United States solve issues related to tax collections, so please call us at (800) 261-6671for more information today.