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Bay Area Estate And Tax Planning Law Firm
Estate Planning
Trust Administration and probate

Options for addressing tax liens

| May 11, 2016 | Uncategorized |

Now that “refund season” has come and gone, taxpayers who did not have the fortune to have an income tax refund check may confront the possibility of owing money to the federal government. Indeed, most people know that the interest and penalties accrue on unpaid taxes, which can lead to a larger tax bill the longer it goes unpaid.

However, the government may initiate a legal claim against a taxpayer to guarantee its interest in collecting taxes through a tax lien. Essentially, a lien can hamper one’s ability to sell property or secure credit. In fact, for those who own a great deal of property (real estate or other property), the government could foreclose on its lien and claim property.

As such, this post will highlight a few options for dealing with a tax lien. 

Ask for a discharge of property – Under limited circumstances, some property may be sold without the application of the tax lien. This could be very helpful, especially if a portion of the proceeds from the sale could help in paying off the lien.

Seek a subordination certificate – This permission allows other creditors to be paid ahead of the IRS when it comes to being paid.

Apply to have the lien notice withdrawn – Naturally, having the lien erased is the most effective way to deal with a lien. If the lien notice is withdrawn, it is almost like the lien never existed. Perhaps mistakes made by the IRS led to the lien or the specter of bankruptcy could lead to a withdrawal.

The preceding is not legal advice. If you have questions about dealing with tax liens, an experienced tax attorney can advise you. 

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