What happens when the IRS files a federal tax lien?

You have received an unsettling notification from the Internal Revenue Service (IRS). The letter informs you that a federal tax lien has been placed on your assets. This moment marks the beginning of a challenging journey through the complexities of tax law.

If you are facing IRS collections, it is essential to understand the implications of a federal tax lien and the importance of seeking professional help.

Federal tax liens are meant to protect the government’s interest in your assets

The IRS has the authority to impose a federal tax lien, which is a legal claim on your assets, if you fail to fulfill your tax obligations or ignore your tax debt. This lien, usually filed with the county recorder’s office, attaches to all your properties, including real estate, personal property and financial assets.

Facing federal tax liens can lead to dire repercussions

When the IRS files a federal tax lien, it can have severe consequences on your financial life, including:

• Notification to credit bureaus, which can negatively impact your credit score.
• Seizure of bank accounts, wages and other assets.
• Limitations on the sale or transfer of property.
• Potential loss of business licenses and permits.
• Disclosure to the public, which can damage your reputation.
• Increased risk of IRS enforcement actions, such as levies and seizures.

A federal tax lien takes priority over many other claims. This includes most unsecured debts. The lien may not dissolve if you declare bankruptcy, unlike other debts.

Addressing a tax lien promptly minimizes the potential damage. A skilled Texas attorney can negotiate with the IRS and explore potential relief options. Your financial stability in the years to come could rely heavily on this.