Understanding IRS Tax Liens

Posted by CourthouseDirect.com Team - 23 November, 2016

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If you’ve neglected to pay a tax debt, you may face a federal tax lien. Tax liens from the Internal Revenue Service (IRS) are legal claims against your property when you do not pay what you owe. There are many reasons you may be unable to fully pay your tax debt before the deadline. Unfortunately, the IRS is strict when it comes to payments. Here’s everything you need to know about finding and understanding IRS tax liens.

About IRS Tax Liens

IRS tax liens can limit your ability to obtain credit, remove your ownership rights to a business property, and follow you even after you declare bankruptcy. A lien may occur after a taxpayer fails or refuses to pay the federal taxes he or she owes. To avoid a property lien, always pay your taxes in full and on time. Don’t ignore correspondence you receive from the IRS. They will work with you to create a repayment plan that will enable you to pay off your debt over time.

If you don’t pay your taxes and ignore correspondence from the IRS, your property is subject to federal IRS tax liens. While the best way to get rid of an IRS tax lien is to pay off your debt in full, this isn’t always possible. Other options exist to reduce the impact of a lien on the taxpayer and the government. There are three main alternatives available in tax lien situations:

  • Discharge of property. If you are eligible for a Certificate of Discharge from a federal tax lien, the IRS may accept your application. Read the provisions of this application to find out if you qualify. A discharge removes the lien from your property.
  • Although subordination does not remove a lien, it enables other creditors have their debts satisfied before the IRS. Subordination can make it easier to obtain a mortgage or loan with a lien.
  • This removes the Notice of Federal Tax Lien and ensures the IRS will not compete for your property with respect to other creditors.

Removing a tax lien is possible with the right help and resources. Once you understand the nature of your tax lien, which property the lien is against, and your options for removing the lien, you can take steps toward recovering good standing as a taxpayer.

How to Look Up an IRS Tax Lien

If you’re a real estate agent or another entity that wants to make a purchase, always check to see if there are active liens against the commercial or residential property in question. IRS tax liens are part of the public record, searchable through the right outlets. If the IRS has placed a lien against a property, it likely indicates the owner owes back taxes and may not be in a position to sell the land. You can offer to pay the outstanding taxes as part of the sale price if this is in your best interest. To make an educated financial investment, uncover any current tax liens and weigh your options.

To find an IRS tax lien, visit a public records site and conduct a Texas Adverse Lien Search. Liens on real properties are recorded in the county in which the properties are located. Sign up to use the site, select the county of the property in question, and conduct a search. An online database will give you the real property records, including liens, in a matter of seconds. If the property you’re interested in has an outstanding lien, you’ll be able to proceed with the transaction or find a different property with this knowledge in mind.

Whether you’re a property owner facing an IRS tax lien or someone interested in buying a property, go about your business knowledgably. What you don’t know can hurt you. Conducting a public records search to find federal IRS tax liens on a property can save you from making an investment you’ll regret.

Property Lien Guide

Topics: Real Estate


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