When a tax lien is filed against you, the government retains a legal claim against your property or wealth. Within this time, this lien will go on your credit score and the public record, making it difficult to receive loans and deal in other financial matters.
This is not an issue that will solve itself. Resolving and getting rid of a federal IRS tax lien takes a long and difficult process. As such, you should be informed and understand what having a tax lien means for you to see the importance of having an experienced tax lawyer.
What are Federal Tax Liens?
A federal tax lien is when the government holds a legal claim against your property because of tax debt you have failed or refused to pay. The lien protects the government’s interests on your property so that, in case other debtors come for you, the lien assures that the government will be the ones to gain your property.
While you are under a tax lien, your credit will reflect your failure to pay, which can stop banks and loan companies from providing you with more loans because of the risk you pose.
Hiring a Tax Attorney
The only way to remove this is by paying your tax debt. However, when you are unable to pay, it is possible to reduce the debt if it is in the best interests of both the government and taxpayer: the government will receive its taxes while you are freed from debt.
Ideally, those in debt would apply for this compromise. But, it can be difficult, knowing the different ways this can go. Hiring a tax attorney will be valuable at this point. Tax attorneys assist taxpayers in reaching a solution that will suit their financial situation. It will also be beneficial if the attorney has experience in debt negotiation.
Within 30 days of paying your debt, your lien record will be removed from your credit report so that banks and other financial institutions will no longer hesitate in providing future loans or making business deals with you.
Though the thought of tax liens and the process to solve this issue may be daunting, it can be addressed well by hiring an experienced tax attorney who will work for your best interest. With your property and other significant investments at stake, this is the smartest choice you can make.