Get the Facts: How to Deal with the Federal Tax Lien

Many of us just want the IRS harassment to stop. But when threatening phone calls and letters are at their peak, many times the next correspondence you receive will be a Federal Tax Lien. Once you receive this notice, seek professional tax relief immediately, it may be more than just your property on the line.

In essence, a tax lien is a legal claim to an individual's property by the Fed. If you are delinquent in paying your tax liability to the IRS, many times the IRS will invoke a lien in an attempt to collect the debt owed. The lien can affect all property and interest in property at the time of notice. If you do not own property, it could affect anything you intend to purchase for the ensuing ten years. 

A tax lien is considered a "secret" lien in that it is only supposed to be known by the IRS and the taxpayer in question. The law prohibits the IRS from disclosing information about the lien to any other party other than the taxpayer, with two exceptions of course. 

The IRS can bring on judicial proceedings to foreclose on the Federal Tax Lien. In this case, the court system becomes involved and the judicial proceedings are considered public knowledge. This can affect many aspects of the individual's life besides Federal property possession.

The second exception involves the Federal tax lien filing process. When the IRS begins the lien process, the IRS issues a Notice of Federal Tax Lien or NFTL and records the notice in the register of deeds office in the taxpayer’s county. This practice is to prevent third parties who purchase property from the taxpayer or lend money to the taxpayer from collecting interest superior to the Federal tax liability on the property or money lent. 

This notice is reported to the three credit reporting agencies. Unfortunately the NFTL will negatively affect your credit, hindering you from securing future property or loans. This can also effect employment, as many employment agencies and organizations now check the potential hire's credit report as a common practice. Apartment complexes and other rental property owners also check a potential renter's credit history as part of the rental application process. An NTFL can essentially inhibit you from finding work or a place to live.

Seeking professional tax relief when you receive notice of a lien is important to your success. The IRS will negotiate your tax debt with your attorney to reduce what you owe. Your attorney can also have the lien lifted once an agreement of terms of tax liability payoff has been met. If you have received notice of a tax lien, contact the experts at Optima Tax Relief as soon as possible. Don't let a lien affect your life; call the attorneys at Optima today.