Federal Tax Liens Explained

Federal tax liens provide the government legal claims over a property and then acts as security to cover outstanding tax debt.

Before IRS or government can charge a federal tax lien against you, they've got to go through a defined process which will help pay the debt before acquiring into arrears.

This is how the process goes:

The process starts with the IRS or government assessing the entire financial obligation of everything they're owed.

Then if their assessment seems that they are able to charge the lien and it is financially feasible, they will then send a notice and a demand for payment. This will be a bill that explains the amount of back taxes they believe you owe.

The last step is usually controlled by the person in arrears whether you disregard or decline to pay the outstanding debt within 10 days of receiving the bill.

Now if all these criteria are met, then a federal tax lien will be made for the total amount of the outstanding debt.

When this lien is filled, it acts as public notification to the creditors that there is a federal claim on a property.

Tax Liens and Credit Ratings

When there is a federal tax lien is charged against you, it will have a harmful effect on your credit rating especially if you have financial troubles already.  

Can a Tax Lien Be Released?

Tax liens may be released automatically after a pre-defined period or they can be discharged by just paying the tax owed together with charges or service fees that can be affiliated with having the lien discharged.

If you're able to pay the tax before the 10 year release date period, you will get a Federal Tax Lien release note within 30 days of finalizing the debt.


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