IRS Liens
Liens are filed by the IRS when the
employee (or employee's manager) believes the IRS should protect the
Government's interest by notifying the public (via a lien) that the IRS
has a claim against you. The lien is most effective against real
estate owned by the taxpayer in the same county. Often, the IRS will
file a lien(s) against the wrong person or entity. When this
happens, the IRS must remove the lien within 30 days of receiving proof
they are in error. This is a rule that is rarely enforced.
From a practical standpoint, once a lien is filed against you, it is
a real pain in the neck to get it released and to deal with all the
aftershocks from creditors, banks and credit bureaus.
To see the IRS position on filing liens
just click here (IRM
5.1)
The IRS lien program is highly automated
now. In addition, practically any IRS employee (even a TEMP) can
permanently damage your reputation by filing a lien in error, prematurely,
or negligently.
The Federal Tax Lien filed by the IRS
attaches to everything you own, but not really. Be very careful
about attempting to avoid collection by transferring assets after a lien
is in place (Date recorded at your county) It is that date that
determines who gets paid first from the proceeds of real estate. To
see when a lien might be less effective against a taxpayer click
here: Superpriorities.
Avoid the filing of liens by the IRS.
If you think you might have a problem with the IRS, there is nothing
illegal or immoral about protecting your assets by transferring or selling
them PRIOR TO THE LIEN BEING FILED. You will then be in a much
better position to negotiate as you will own fewer assets reachable by the
IRS.
Other ugly news about Federal Tax
Liens---They ruin your credit, even when issued erroneously. The lien
survives all types of bankruptcy, so even if you could bankrupt out of
some IRS Debt, they will be waiting there with a hand out to collect on
your property after bankruptcy is discharged. The lien will
ruin your banking relationships and most lending relationships making it
difficult to do business in today's world. As long as the lien is
on, no one will want to loan you money for a house, car, RV or anything
else. The common belief is that the lien entitles the IRS to take
anything from you they decide to. This is not true but has become
common belief among banks and lenders due to their experience with
borrowers who have IRS difficulties.
Avoid a lien if at all possible.
However, if your credit is already shot, don't lose sleep over the
lien. It is just one more bullet in a bullet riddled time in
your life. Call me. Let me help.
- Randy Anson
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