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Back Taxes and Federal Tax Liens

October 18th

If you have had experience with back taxes, you may be familiar with the concept of a Federal Tax Lien. If you have had the unfortunate experience of having the IRS place a lien on your property, you know that it is no picnic. Here a tax debt lawyer explains the federal lien process, how it relates to back taxes, and how to deal with liens if you should be faced with one.

When Back Taxes Mean Liens

The IRS has a legal right to place a lien on your property if you fail to pay back taxes. The lien is a legal claim which allows the government to seize your personal property, including your home or your car, as well as other financial assets, in remuneration for your failure to pay owed taxes. It is not a first recourse for the IRS, however; there must be a record of non-payment on your part before the agency can place a lien on your property.

Once there is a lien on your property that lien becomes a matter of public record, which can be bad for your credit standing. To avoid the lien, of course, the best option is to pay your back taxes when they are due, before the government can place liens. But if you cannot avoid having a lien placed, there are a few ways to have it removed. One is to allow the sale of the asset to cover the debt; other methods, such as subordination and withdrawal, are specific cases that may or may not apply in your specific situation.

Tax debt lawyers advise paying back taxes before a lien is brought against you, because it can hamper your credit and may not be discharged in all bankruptcy filings


City To Sell Liens To Recoup Back Taxes

October 22nd

tax lienBack taxes are troublesome for everyone involved. For debtors, wage garnishment and tax liens can result; causing even further financial trouble if the debts aren’t resolved. While the IRS has a low tolerance for tax debts, many other creditors are a little more flexible. However, one city is tired of playing nice and is looking to more serious consequences in order to collect on back taxes.

Collecting Debts

Pittsfield, MA reports being owed an estimated $3 million in back taxes. Dating back as far as 20 years, these uncollected debts are taking a toll on the city’s finances. Those who owe these taxes are being warned that the city will soon be outsourcing the collections to private firms and investors; who are likely to take serious action to collect.

City officials have notified owners of more than 300 properties that their home will become part of a tax title auction in early 2013. Winning bidders of the title auction will pay the full amount of the tax lien owed on the title and will, in turn, walk away with the right to pursue recovery efforts on delinquent property-tax payers. Property owners who fail to pay the private collector could lose their home faster than a lender-initiated foreclosure, less than 30 days in some cases. Property owners who do pay the private collector are likely to face up to 16% interest on their debt, also required to be repaid in order to protect their home.



What You Must Know About Tax Liens

July 11th

If you’re trying to settle your back taxes, the IRS might sometimes feel like it’s launching a full-scale attack.  From collection attempts to tax liens, it can be hard to catch a break.  However, when you have information and resources backing you, it doesn’t have to be that way.  As part of our aim to assist and educate you, we’ve created this resource to answer your questions about tax liens.  Between this resource and our expert staff, you shouldn’t have any problems resolving your IRS issues!

Essential Information

What exactly are tax liens?  Put simply, a tax lien is a type of security interest that is put on your personal property because of your failure to pay your taxes.  It isn’t just income back taxes that can get you into this kind of trouble.  Failure to pay gift taxes and estate taxes can also land you with tax liens.

The IRS explains everything you need to know about tax liens on their website.  From how to get rid of one, to how it affects you, it’s all here!  Keep in mind, you may be able to appeal the lien!  You should always investigate this alternative before going along with the IRS.

If you think your tax liens may be eligible for appeal, then contact one of our tax debt lawyers to find out how we can help you through this process.  Even if your tax liens can’t be resolved through this route, we can still get you back on your feet, and eliminate your back taxes.

If you have basic questions regarding a tax lien, you can contact the IRS at this number: (800) 913-6050.


Tax Liens and You

June 13th

tax lienWhen you avoid paying taxes you are setting yourself up for a clash with big brother.  The IRS has some major abilities to collect on the tax debt of others.  One such way of collecting upon that debt is through tax liens.

Tax liens can be severe and devastating to an individual, and you should be cautioned to not put yourself in such a situation. If you do, you will undoubtedly be in the need of a tax debt attorney to assist you and possibly help you avoid the loss of your property.

What is a Tax Lien?

A tax lien is a lien imposed by the IRS and law upon properties of the debtor in an attempt to collect upon tax debt.  In other words, the IRS can take ownership of your properties as payment for your debt.  When a lien is placed you are left with a few options.  One option is to get into contact with a tax professional (i.e. a tax debt attorney).  In doing so, they may be able to work with the IRS to come to some sort of settlement that allows to you keep at least a portion of your positions under lien.  If you choose to not act upon the lien then you will lose those properties to your debt.  This consequence is one that most everyone wants to avoid if at all possible.

Your first step in avoiding a tax lien against your property is to attempt communication with the IRS.  Contact them about your options for repayment and work with them to set up a plan for repayment.  This will show them that you are making an attempt and they appreciate that fact.


Another Celebrity Tax Lien

May 9th

While tax liens are not commonly publicized, they do grab media attention when the victim is a celebrity. However, don’t feel sorry for the victim just yet as they often owe thousands of dollars in back taxes to have brought about the tax lien.

Singer And Widow

R&B singer and widow to rapper Notorious BIG, Faith Evans, is in trouble with the IRS over unpaid taxes. Reportedly owing over $60,000 in tax debt for the years 2008 through 2010, Evans has found herself in the middle of a California sized tax lien.

The State of California Tax Franchise Board has issued a tax lien against Evan’s personal property if she doesn’t pay her taxes soon. Failure to pay her tax debs could result in garnishment of her bank accounts and seizure of assets like her home and cars.

Evans’ financial troubles have been plaguing her for years as she has already faced three other tax liens in prior years from the states of California, New York and New Jersey. Evans was also sued in 2010 for $1 million over unreleased videos of her late husband, which were allegedly the property of an entertainment company.



Is My Home At Risk From The IRS #3: Closure

November 16th

Being in debt of any kind is a difficult situation. Not only are you dealing with the money you owe and may not have, but it isn’t uncommon to begin to feel bad about yourself. This can be especially true of anyone who has faced an IRS audit, has unpaid taxes or has experienced a tax lien.

Finding Peace With Your Situation

Anyone who has faced negative experiences with the IRS knows the effects of how these situations can impact your emotions. Situations like these can make you question your ability to take care of your family and cause you to feel like an irresponsible taxpayer. One thing you can find peace in is that you are not the only one. Owing back taxes is more common that you would think. In fact, it is estimated that nearly 6 million people owe money to the IRS, some even tens of thousands of dollars.

Not only are you not alone, but you have tools to get yourself out of the situation. The IRS is actually fairly understanding of people’s financial situation. They understand that sometimes bad things happen to good people, which is why they offer a few ways to help taxpayers get caught up on their tax debts. Whether you are facing unpaid tax debts or have recently resolved your tax debts, don’t stress about your situation. Be proud that you are about to or, have successfully resolved your tax debts.


Is My Home At Risk From The IRS #2: Cooperation

November 9th

As we have discussed, owing the IRS is not a position anyone wants to be in. Due to the serious nature of IRS collection efforts, it is possible to experience serious consequences if you don’t pay your taxes. The IRS can garnish your wages or place a tax lien on your property in efforts to collect on the debt. However, communication is key and can help protect your home from IRS tax collectors.

Cooperate With Collectors

The second most important aspect to dealing with the IRS is cooperation. Many people assume that the IRS is not willing to negotiate or handle their situation with understanding. In fact, the IRS is fairly flexible and is very willing to assist taxpayers in resolving their tax debts. However, this negotiation is a two way street and requires patience from both parties.

Let’s face it, the IRS will get their money one way or another so cooperating with them to negotiate a payment deal is your best option for avoiding unwanted consequences. Once you have gotten in contact with the IRS make an effort to be pleasant when explaining your financial situation. Offer to arrange for automatic debit of your payments or two send post-dated checks for a few months worth of your payments. This shows good faith on your part and is more likely to result in a fair tax debt payment plan.



Is My Home At Risk From The IRS #1: Communication

November 2nd

Unpaid taxes are serious business and the IRS does not handle them lightly. Unlike other creditors, the IRS can have access to your assets without much of a court battle. The IRS maintains the right to garnish wages and place tax liens against your personal property much faster than other creditors. This  means that, unfortunately, “Yes” your home could be at risk if you have significantly delinquent taxes. However, this does not  mean that you should give up. There are a few ways to avoid having a tax lien placed on your home.

Communication Is Key

The worst thing to do when you owe the IRS money is to ignore their collection efforts. Although dealing with the IRS can be scary at times, they aren’t in the business to ruin your life. Owing the IRS money is more common than you think and they are willing to work with you to help get the tax debts paid. If you are having trouble meeting your tax debt payments, contact the IRS right away to explain your situation. In many cases, the IRS will allow you to negotiate a payment plan. You may be required to provide proof of your financial hardship and participate in a lengthy negotiation process. If the process becomes overwhelming, a qualified tax attorney can help you resolve your tax debts easily and affordably.


How a Tax Attorney can help Release your IRS Bank Levy

September 12th

An IRS levy is a seizure enacted by the IRS as a means of collecting back taxes. Such levies are typically issued against cash held in savings or property holdings and are typically the result of a miscommunication between the taxpayer and the IRS resulting in high levels of unpaid taxes or tax debt. While IRS levies should be avoided whenever possible through punctual tax payments and communication with the IRS, if the worst does happen, a tax attorney can be the best means of getting the levy released.


Be Timely

First and foremost, the IRS tax levy must be appealed during the first twenty-one days of notification. Even with the assistance of a certified tax lawyer, you will need to operate with haste in order to beat the deadline.

It is therefore generally a good idea to begin collecting information as soon as you are notified. It is important to get the name and contact details of the person at your bank responsible for managing your levy at the same time that you are notified.

File for a Collection Due Process Hearing

A tax attorney can appeal your IRS bank levy by requesting a Collection Due Process hearing with the IRS. There are a few common defences that are used in such cases to convince the IRS to lift the levy.

Most commonly used is the defence that the taxpayer will suffer financial hardship if the tax levy is not lifted. In such instances, the taxpayer must prove that they will be unable to meet their basic needs should the levy not be lifted.

A tax attorney might also use the similar defence that the taxpayer requires lenience, because they were in bankruptcy at the time that their record was assessed. When a taxpayer is facing bankruptcy at the time of an assessment, the IRS is required to allow for leniency on any tax debts the individual may have accrued.



IRS Violates the Law in Issuing of Tax Liens

August 22nd

WebCPA has reported that over 32,000 taxpayers may have had their rights violated by the Internal Revenue Service. Taxpayers may have been harmed by the IRS’s lack of compliance with legal requirements to notify them and their representatives of their rights related to tax liens in a timely fashion.

IRS Fails to Comply with the Tax Code

Section 6320 of the Tax Code requires that the IRS notify all taxpayers in writing, at their last known address, within five days of the filing of a Notice of Federal Tax Lien. However, the most recent report conducted by the Treasury Inspector General for Tax Administration found that some taxpayers may have been violated or jeopardized by the IRS failing to file such notice in due fashion.

Each year the Treasury Inspector General for Tax Administration is required to determine whether the IRS’s tax lien notices comply with the statutory requirement. This year, the Treasury Inspector General, J. Russell George, reviewed a sample of 125 federal tax liens for the year ending June 30, 2010. After careful examination, George still could not determine if the IRS had always followed the legally mandated procedures.

In addition, the report actually found that the IRS did not always even follow its own procedures for notifying taxpayers’ representatives that federal tax lien notices had been filed

In situations where the notice was returned as undeliverable, George found that the IRS may not have attempted to resend them, or even update addresses in their records.

J. Russell George has recommended that, at the very least, the IRS needs to ensure that procedures are consistent. With this in mind, the IRS has stated it plans to revaluate procedures to ensure they are consistent across the board.



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