Federal tax liens are administered by the government following the laws. It is quite easy and simple to collect these when compared to other form of liens. Furthermore, it is the duty of the IRS to reclaim each tax owed to the government.
Once a federal tax lien has been declared against a taxpayer, he must prepare himself for it can be enforced against his property. If there’s a joint ownership of a property though, the property of the defaulting taxpayer would only be subjected to the lien. In most states however, there are some cases wherein the entire property would be utilized to recover the debts.
Federal tax liens are a secure and preferable opportunity for the government to get the taxes owed to them. It also gives them power over other creditors. It must be noted that procedures differ for each state in the US, and even certain conditions are not totally the same.
Did you know that the Internal Revenue Service or IRS has several back taxes collection methods to get the money you owe to them? This is the reason why it is a must to make an IRS plan to save your assets from being seized by the government. Here they are:
Tax Liens and Deeds
Tax liens and deeds is a collection method utilized by the government by selling your property to investors. The investors will pay for your back taxes. If you fail to redeem your property in the specified period, the investors get to own your home and the government gets their money.
The IRS uses this so that they can seize funds out of your paycheck. They can get a large percentage from this collection method.
This is a type of collection method wherein it allows the IRS to get funds from your bank account in order to satisfy your tax debt. It is a rough action that is going to leave you with no money in the bank.
Seizure of Assets
The IRS may use their powers to get assets from delinquent taxpayers and one of this is the seizure of assets. This type of collection method can affect your property, car, and even personal belongings. Do not test the IRS to do this last course of action.
If you want to avoid all of these collection methods, it is best to pay your taxes on time. Now, if you are already in an IRS tax lien trouble, create a plan to save your property and assets before it is too late.
Do you know that there are other ways of releasing a federal tax lien? If you do not have any ideas yet, better check these out.
You must find out if the statute of limitations on your lien has expired or not. The IRS is given ten years to collect the due taxes from you. The ten year period begins when they create an assessment on their computers. This is done six weeks after the filing of returns. The lien is automatically released once the statute period expires. However, the IRS does not send out the release. You need to ask from them a copy of it. You can also fax them for a hard copy of the release of federal tax lien.
To begin with, do not let the federal tax lien be filed against you. Ask for a hearing immediately from the IRS when they send the Notice of Intent of Filing. Doing so would at least cause delay of its possible filing. Just do not forget to give them a valid reason why the filing of the lien must not push through.
These are just some of the ways to release federal tax liens and even avoiding it. The most guaranteed way though is paying the back taxes, and any fees and interest along with it. If you do this, your credit report would be clean again.
Did you know that the IRS also has the power to enforce a tax levy on your earnings if you owe them money? They are going to send you a notice and demand for tax payment after determining the debt. After that, if still you do not make the payments, the IRS would send a final notice that is going to give you a 30 day grace period to resolve the back taxes. Do this before they would enforce a tax levy on your income. Again, if you fail to respond to the reminder of the IRS, the government is going to enforce the law in order to fulfill your debt.
The tax levy process would begin on your salary when the IRS sends a wage levy notice to your place of work. Some and even half of your earnings are going to be confiscated and then submitted to the government. You would just be left enough with some money to cover your basic needs. The levy remains until the IRS gets all the money you owed with the tax debt. This includes any interest and fees incurred along the process.
Submit your annual income taxes right on the schedule always. Do this to prevent the possibility of getting in trouble of tax debt with the IRS. Maintain a clean credit report, stay out of tax lien, and never fall victim to tax levy.
There are a lot of people that can easily be frightened when dealing with the Internal Revenue Service. A simple tax debt can become a very complicated issue in the long run if no payment was done to them. The most effective strategy for problems like this is to take the Internal Revenue Service head on. Pay your bills in the specified time in order to handle taxes effectively. Remember that the Internal Revenue Service do not like to be owed with money, most especially when it comes to extended due dates.
If you have come across the term lien and do not know yet its meaning, then it is time to find out. A lien is filed by the Internal Revenue Service. They do this when they notice that the tax collection from an individual is in distress. They do not seize properties right away because there are certain processes that need to be done first.
The Notice of a Federal Tax Lien is going to be filed by the office of public records. Furthermore, any property you own is going to be affected by the lien. It can damage your ability to borrow credit and stop the chances of getting a loan.