A lien is a legal claim on property that is used as security or collateral for the payment of a debt owed by the property owner. If the property with the lien is sold, the proceeds of the sale must be applied towards the remaining balance of the debt. A deed of trust is a common form of a lien on real property. A tax lien is another example of a lien. In both of these examples, if the house is sold, the lienholders will be able to receive their outstanding debt from the proceeds of the sale.
In some cases, the creditor can also use that lien as a way to sell the property to collect on the debt. A levy grants the creditor the right to take property subject to the levy and sell that property.
It can be tempting to push-off such problems for another day, but these letters can quickly snowball. Before you know it, months have passed, and you are in danger of receiving a lien notice. The IRS deals with many individuals and families undergoing financial hardship and cannot repay their full debts.
With help from an experienced tax attorney, you can work with the IRS to resolve your debt before a lien or levy is issued. You may even be able to settle your debt for much less than you owe.
If you are notified about a lien or a levy, you should immediately reach out to a tax professional. The IRS is not always right — government agencies get tied-up in bureaucracy, and sometimes paperwork is misplaced or never transferred to the correct department.
It is also possible that your tax filings from previous years are incorrect, and the IRS is claiming you owe a debt you do not. The IRS had garnished his wages for over 2 years; he had been living-off his retirement savings and felt hopeless.
He assumed he would never receive another full paycheck again, no matter how long he worked. He came to me expecting to file for bankruptcy. Within 24 hours of coming to our office, the levy was released and we were able to file amended returns to correct the liability and seeks refund of his garnished wages.
There is a short window of time in which you can appeal a lien or levy. Whether you live in Atlanta or nationwide and have received notice of a tax lien or levy, The Law Office of Alyssa Whatley wants to help you. But what are liens and levies, and how are they different? What is a Tax Lien? What is a Tax Levy? Tax Resolution Checklist Download. Read More Mike Vullo.
Read More David R. Read More PB Looper. Read More Doug M. Read More Tom S. Thank you! The IRS will file a lien when the agency feels there is a chance that collection is at risk.
It does not just take your things. Filing a tax lien is normally determined by the dollar amount. The Notice of Federal Tax Lien is filed in the public records office and then attached to any type of property you own.
If you happen to sell that property, proceeds will be used to satisfy the lien. Now that the lien is filed, the equity belongs to the IRS. The IRS files its Federal tax lien in the county where you reside. It must be filed in the county where property is located for the tax lien to affect real estate. Anyone pulling a credit report on you will see the tax lien on your record.
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