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Removing Federal Tax Liens

Several years ago the IRS was taken to task by Congress over reports about customer abuse. To their credit Congress managed to reign in the IRS somewhat and caused them to adopt a more user-friendly system along with a new attitude.

If you do have a Federal Tax Lien filed against you then your options for financing anything are nearly impossible. Forget the new car, much less the home you're thinking of buying in Florida. The government wants their money....period. However, the IRS did release a paper that identifies four reasons whereby a tax lien can be removed from public records. This includes public records like credit reports. This does not mean you no longer owe the money. It simply means you are free to go and purchase a new home without the tax lein working against you.

Now the four reasons for having a tax lien removed are:

1. If, by releasing the tax lien, this would enable the taxpayer the ability to borrow money for his or her business. This would increase the government's chances of collecting because the business would most likely succeed with an influx of fresh capital.

2. If by releasing the tax lien, this would enable the taxpayer to settle with the IRS for a lesser amount.

3. Administrative or premature procedures. This happens when a field officer in their haste to record a lien does so prior to having their superior approve the lien.
4. When removing the lien is in the best interests of the United States and its taxpayers.

Now that you know this you don't have to feel so intimidated when dealing with the IRS.

What Is a Feeral Tax Lien? And How to Avoid it?

What Is a Fderal Tax Lien?

A Federal Tax Lien (FTL) is a legal instrument that secures the claim of the United States in the right, title, and interest of a debtor taxpayer's assets. It is a public document and is recorded at the County Clerk's office or the Secretary of State, depending on local law. This is done to serve notice on all creditors or other interested parties of the government's claim.

The Federal Tax Lien is a negative item on the credit bureau report of the debtor. It may result in some creditors calling in their notes upon becoming aware of the FTL.

How To Avoid Federal Tax Lien?
When faced with a mountain of unpaid tax debt, your best bet is to work with the IRS in order to prevent the execution of a federal tax lien. Here are some tips that will help you work out terms that will be amicable to both you and the government, and get you back on track.

First, get some professional help. The fact of the matter is that the Internal Revenue Service has well trained tax experts working for them. You will need some professional assistance yourself, especially when looking at huge sums of money. Professional tax attorneys will know how to provide you with the best options to avoid the implementation of a federal tax lien. In many cases, they can help you work out a payment plan with the IRS that will allow you to make monthly payments voluntarily, rather than go through garnishing of your wages.

Next, be completely honest about your financial status. Nothing will derail the willingness of the IRS to work with you like trying to hide assets or not providing full disclosure about your current sources of income. Don't waste time thinking you can hold back details about that part time job so that you can still have a little extra spending money while paying off your tax debt.

As tempting as it may be to hold something back, you will do much better in the long run to lay everything on the table. If you are not, negotiations are likely to cease, and a federal tax lien imposed immediately.