Release of Tax Liens and Levies
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The Internal Revenue Service acts quickly on delinquent taxpayers once they determine that you owe an unpaid tax. The IRS has recently expanded the number of agents (called Revenue Officers) it employs to collect taxes that have not been paid from individuals and businesses. It also has improved its efficiency in seeking out delinquent taxpayers.
Once you fail to pay your tax liability when it is due, the IRS will send a letter to you demanding that you make an immediate payment of the tax liability. At this point, you have several choices. You can either make the payment in full, set up an tax installment agreement, apply for an offer in compromise, apply for noncollectable status, or in some cases, the liability can be reduced or dismissed if it is incorrect.
If you do not voluntarily comply with the request for payment, the IRS is required to collect the amount due from you through an enforcement action. This can be done by filing a Notice of Federal Tax Lien, or serving a Tax Levy on your bank account or wages.
Notice of Federal Tax Lien
A Notice of Federal Tax Lien is filed in order to give the government first priority against any other creditors or purchasers of your property. This action has the ability to have a significant negative affect on your credit score.
Tax Liens give the IRS a legal claim against your property as security or payment for your tax debt. A Notice of Federal Tax Lien may be filed only after:
- The IRS assessed the tax liability;
- The IRS sends the taxpayer a Notice and Demand for Payment – a invoice bill that tells you how much you owe in taxes; and,
- You neglect or refuse to fully pay the tax debt owed within 10 days after the IRS notifies you about it.
Once these requirements are met, a tax lien is filed for the amount of your tax debt owed. By filing notice of this lien, the taxpayers other creditors are publicly put on notice that the IRS has a claim against all your property, including any property you acquire after the lien has been filed, for the unpaid debt. The tax lien attaches to all your property (such as your house or car), and to all your rights to property (such as your accounts receivable, if you are a business), until there is either a tax lien removal by it being released or withdrawn.
Important Collection Due Process (CDP) Rights
When the IRS is trying to collect the tax debt they will send you important notices detailing your rights for a Collection Due Process hearing.
DO NOT IGNORE YOUR COLLECTION DUE PROCESS RIGHTS.
Once you file a Collection Due Process Request, the IRS will schedule a hearing with an appeals officer. The collection appeals officer will review the case and submit a written document summarizing his or her conclusions to the case, including proposals for less aggressive collection alternatives.
If you have received a Notice of Intent to Levy or Notice of Filing of Federal Tax Lien, you should immediately contact a qualified attorney who understands the tax laws to protect your rights and get assistance with tax lien removal.
By: Timothy S. Hart
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