Local: (423)870-2440

Toll Free: (888) 828-1040

Call Today for a Free Consultation!

What Is A Tax Lien?

by Amy Psyhos

It’s almost tax season. Most people dread paying taxes and the confusion and mystery that looms behind the IRS. You may have been one of the lucky ones this year to have received a tax lien in the mail. If you’re like most people, you may not even know what a tax lien is. Moreover, a tax lien is a legal claim by the government against a non-compliant taxpayer’s assets. Now, let’s dive into what that actually means for you as a tax payer.

 

You might not be familiar with the term “tax lien”, but we would dare say that most red-blooded Americans are familiar with the tale of the down-and-out gym manager, Peter LaFleur. Dodgeball: A True Underdog Story relies on Vince Vaughn’s character defaulting on the gym’s mortgage. His Globo Gym rival, White Goodman purchases LaFleur’s, wait or it, on a tax lien.

 

In a last-ditch effort to save the guy, LaFleur organizes a band of misfits to compete in a dodgeball tournament. The prize for winning the tournament in Las Vegas, NV, is $50,000 dollars, which is just enough to save the gym. All in all, a tax lien can put you between a rock and a hard place. So, let’s discuss how you can remedy the situation effectively.

 

How Do You Deal With A Tax Lien?

 

First Option

The most straightforward option for dealing with a tax lien is paying the balance outright. This balance will include the amount of taxes you owe and any court fees that might have been accrued in the process. The tax lien releases within 30 days of full payment. 

 

Second Option

A lien “discharge” removes a tax lien from a specific property. There are a few different ways that a tax lien can be discharged. For example, one could pay the lien in full, set up payments, get the debt dismissed in bankruptcy court, or sell the property at a rate higher than the total amount owed.

 

Third Option

Subordination allows other creditors to move in front of the Internal Revenue Service. This will not remove the tax lien, but it will allow you to secure a loan or a mortgage from a financial institution, which you can use to pay off the tax lien in the future.

 

Of course, most people won’t obtain the funds to pay off their tax lien by winning thousands of dollars at a dodgeball tournament. If you need a more comprehensive plan to overcome your tax lien, we at U.S. Tax Solutions can assist you. Give us a call today or fill out your information on our website here. We look forward to helping you!

 

IMG_1841

Amy Psyhos is an Enrolled Agent and our Tax Resolution Manager. She personally assists potential and existing clients in having a better understanding of the resolution process. She evaluates each client’s financial information to identify available settlement options to best handle their IRS debt. As information is requested from the IRS, she gathers and prepares all of the necessary documents to ensure all IRS deadlines are met.

Leave a Comment