Taxes are a complicated topic — it doesn’t matter how many times you file your own taxes or look over the issues related to them. What makes this inherent fact about taxes even worse is that taxes are also an unsavory and boring topic that few people want to actually learn about. So we want to get down to the brass tax (pun definitely intended) of a specific issue today: what is a tax lien and what can you do about it?
A tax lien is placed on an asset or assets in order to force the debtor to pay what he or she owes. Many people struggle to pay their debts, may they be tax liabilities or otherwise, and these liens make it nearly impossible for the individual to sell the asset, transfer the asset, or secure new lines of credit.
Liens can be utilized outside of the context of taxes. For example, if you fail to pay someone after they did work on your home, they could file a workman’s lien against you. But tax liens are more common, and the IRS hands out many of them every year. There are steps you can take to avoid a tax lien or appeal it.
You can file for a discharge of the property, which essentially allows the individual to sell the property as is the lien didn’t exist. You can attempt to subordinate the lien through formal processes, which means that while the lien remains, the IRS no longer takes precedent when it comes to your debt payments. You can pay other debtors first.
Last but not least, you could apply to have the lien removed. In any of these cases, you should consult with an attorney first.
Source: FindLaw, “What Is a Tax Lien?,” Accessed Aug. 31, 2017