How Can You Prevent a Tax Lien from Damaging Your Finances?

Clip art of a wrecking ball labeled "Tax" demolishing a house

If you owe the IRS in back taxes, the federal agency can assess a tax lien against you for the amount you owe, plus any penalties and interest that you have accrued.  This can mean the federal government has a legal claim to your property, and it can remain this way until your tax debt is paid.

Learn how a tax lien can affect your finances, and what options you have to get it removed.

Key Insights We Will Discuss

  1. How a tax lien can impact your finances
  2. Ways to have a tax lien removed

How a Tax Lien Can Impact Your Finances

A tax lien can have a large impact on you finances, and your life.  Some of the effects it can have include:

  • You may not be able to get credit.  The IRS can file a public notice, which can be seen by creditors when they process your credit application.
  • It can impact assets like your house, car, stocks, shares, and more
  • It can also affect the assets you acquire while the lien is assessed
  • It can jeopardize selling your home or refinancing your mortgage.  Any equity you have in the property will go towards your tax debt
  • Any business property and accounts can also be liable
  • It can prevent you from getting a new job if the employer does not hire staff members with federal judgements against them

How to Get Rid of a Tax Lien

Fortunately, there are ways to have a tax lien removed.  The first step you should take is to hire a tax attorney.  He or she can help guide you through the options below, determine which choice is best for you, and help you get the lien removed.

Some options you can pursue to remove a tax lien include:

  • Pay off the entire amount of debt you owe the IRS, including interest and additional charges
  • Set up a payment plan with the IRS to pay your back taxes in installments
  • Apply for an Offer in Compromise to try to settle your debt for less than you owe.  Work with your tax attorney to determine if you qualify for this option.  You will have to prove you are facing financial hardship and cannot pay your full liability
  • Apply for subordination.  This allows other creditors to move ahead of the IRS in line for repayment.  While it will not remove the lien, subordination is important when trying to obtain a critical loan, like a mortgage.
  • Apply for tax lien withdrawal.  This removes the public notice and assures other creditors that the IRS is not competing with them for the rights to your property

Contact a Tax Attorney

If the IRS has assessed a tax lien against you, contact Ayar Law at 800.571.7175 to receive free, no-obligation tax advice from a tax attorney.

Executive Summary:

  • A tax lien can have large financial impacts, including the ability to obtain credit, sell your house, or even get a job
  • With the help of a tax attorney, you can explore various options to have the tax lien removed, include setting up a payment plan with the IRS, applying for an Offer in Compromise, and more
  • Contact Ayar Law to get free, no-obligation legal advice at 800.571.7175

Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.