A tax lien is brought against your assets by the Internal Revenue Service or a state or local taxing authority if you've failed to pay income or property or taxes. A tax lien can attach to any assets you own, including properties and businesses, and can also adversely affect your credit. Unlike a tax levy, a tax lien does not allow the government to seize assets and property. A tax lien does however, allow the government to force the sale of properties or liquidation of assets. When the property or asset is sold, the government can collect a portion or all of it, depending on the amount you owe. If you find yourself in this situation, there is help.
Collection Appeal Rights for Federal Tax Liens
The Internal Revenue Service has an independent entity within it called The Office of Appeals, which you may turn to for assistance. If a tax lien has been brought against you, you may qualify for one of the two appeal procedures: Collection Due Process or Collection Appeals Program. Which process you use is determined by the nature of your case, although the Collection Appeals Program will apply to a broader range of circumstances and is a faster process. Both appeal procedures involve a hearing in which you may represent yourself or be presented by a third party, such as an attorney.
Federal Taxpayer Advocate Service
The Taxpayer Advocate Service is a government organization and can provide assistance with your tax lien. If your tax lien is causing you to experience financial hardship, if you don't understand the terms of the lien or if you're unable to get a response from the IRS, contact the Taxpayer Advocate Service through a local office or through its toll-free telephone number: 1-877-777-4778. Ask the person on the telephone to fill out Form 911 for you, which is a Request for Taxpayer Advocate Service Assistance.
State Tax Liens
A state's department of revenue can bring a tax lien against you if you owe state income taxes or business taxes. State tax lien laws vary, so consult your state's local tax authority about your options. Like the IRS, a state department of revenue can work with you to create management installment plans. States also have their own internal taxpayer advocate services, which you should contact for assistance.
Local Tax Liens
A local tax authority, such as a county's assessor and tax collector, can put a lien on your residence or business for not paying property taxes. If you feel that the tax is too high because the value of your home or business property has dropped, ask the county to reassess the property's current value. You may be able to adjust your tax bill. Some counties even allow you to appeal the assessed value of your property online through their websites.
Cooperation with the Government
Demonstrating a willingness to cooperate with any tax board is always a good idea. The IRS, state or local tax board does not want you to lose your property or assets. It just wants to collect the money you owe. If you work with them to find alternative payment methods, they may be willing to remove the lien from your property or assets. For example, if you enroll in the IRS Direct Debit Installment Agreement, a lien may be removed.
If you owe the a significant amount of taxes or own a business to which the federal, state or local authorities attached a lien, you may want to consult a tax attorney. A tax attorney can challenge tax authorities in court and help you navigate confusing tax laws. A tax attorney can also act as your advocate and negotiate a payment plan that can help you keep your assets and properties.
Based in Chicago, Annie Wang has been writing since 2008. Her work has appeared in World Architecture News and other online publications. She holds Bachelor of Arts degrees in English and art history from the University of California, Davis.