Tuesday, August 5, 2008

"Lien-ing Tower of Taxes"

Got a tax lien filed against you by the IRS? You are in the same boat as thousands of taxpayers every year. In fact, if you owe $25,000 or more in taxes there is an "implied lien" against you whether it has been filed at the courthouse or not. This is becoming more popular these days and a recent article on Yahoo Finance further solidifies that the IRS is cracking down on taxpayers and liens are going to be a bigger part of their arsenal.
You will have this lien until it is paid in full or it expires which is 10 years from the date the lien is placed. There are some things that CAN extend this period however, such as submitting an Offer in Compromise, Bankruptcy, an Audit, and a collection due process hearing, just to name a few. This will affect your ability to finance a home, automobile or get most types of loans from a lending institution.

Sound pretty bad? Before you answer, there is one more type of lien that you need to be aware of.

This is called a Statutory Lien or "Silent Lien." This occurs when a lien is filed on a taxpayer and in later years the taxpayer incurs additional debt. Even though the initial lien is filed for the original liability amount the payoff for that lien will include ALL the liability owed to the IRS. For example, if you got a lien filed for $10,000 against you in 2004 but in 2007 you could not pay the $11,000 you owed for that year, your tax lien will still say "$10,000" at the courthouse. But the $11,000 from 2007 is what is known as a "Silent Lien" and your payoff will include both amounts for a total of $21,000 plus penalties and interest.

Can this tough situation be avoided? Yes! File your taxes on time and if you cannot pay the amount owed please consult a professional tax resolution company.

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