The Rights of the Taxpayer and IRS Tax Liens

A Federal Tax Lien from the Internal Revenue Service is a public acknowledgment and formal security filing on a taxpayers assets. As a security interest, an IRS Tax Lien has to be addressed or satisfied before an asset can be sold. If, for example, there is a Federal Tax Lien on your home, you are required to first satisfy the tax lien before you would be able to refinance or sell your home. Perhaps the easiest way to satisfy the lien is to pay it in full out of the proceeds of the sale of the home. If this is not an option, the taxpayer can request the IRS to discharge the lien to allow completion of the sale or a taxpayer can seek that a federal tax lien be made secondary to the financial lending institution's lien in order to consummate the sale. In light of the recent economic downturn the IRS is working to expedite request to assist taxpayers in the refinancing of their home.

Knowing your rights as a taxpayer are critical to being aware of your options to address open tax balances. In order for a tax lien to be filed the Internal Revenue Service after: -The IRS determines and assesses the liability or amount owed. -The IRS sends a Notice and Demand for Payment detailing how much you owe in taxes. -You refuse or fail to pay the amount owed within ten days of IRS notice.

The filing of a federal tax lien is a public notice to your creditors of the amount owed to the IRS and is secured by all of the property you own or thereafter acquire. This notice is also used by courts to determine order or priority in either sales or bankruptcy proceedings. As a public record, the filing of a lien will affect a taxpayer's credit rating. Thus, addressing a lien is critical in order to limit impairment of assets and for the procurement of credit of any type. After the tax obligation is assessed, then the IRS will release and remove the lien within thirty days.

In addition to reviewing the original cause of the amount due the IRS and the review of the original source documents to review their validity, then taxpayers can begin to look to options to resolve and open monies due the IRS. These options include.

-Paying the tax and interest in full while requesting abatement of the penalties. -The successful submission and acceptance of an Offer in Compromise. -Installment plans, though do address and confirm the method and terms of payment, tax liens are typically held in place until the last installment payment is made and the IRS obligation is paid in full.

Tax law is not for the meek of heart or faint hearted. However taxpayers who aggressively address their tax obligations rather than waiting for collection efforts to begin and heighten are better off, as they are saved even further financial disruptions, filings, interest and penalties.

John Dillard is a Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit (An Atlanta CPA firm) and for his latest book Overcoming Life's 9/11's: Job's Journey visit

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