Thursday August 17th 2023 IRS Tax Liens: What is an IRS Tax Lien?
Attorney Omar Zambrano ??
My mission is to eliminate your debt quickly and permanently. Law Practice in Southern California. ?? Let's Talk ??(626) 338-5505 ?? Free Consultations ??
An IRS tax lien is the government's legal claim against your assets when you fail to pay your tax debt. It's a way for the IRS to ensure they get first dibs on your property, superseding other creditors.
Attorney Omar Zambrano explains, "A tax lien isn't just a piece of paper. It's a powerful tool the IRS uses to secure its claim on your assets, ensuring they get their due."
When a taxpayer owes the IRS and doesn't make arrangements for payment, the IRS can file a public document called the Notice of Federal Tax Lien. This notice alerts creditors of the government's claim on:
Real estate
Personal property
Financial assets
The Impact of an IRS Tax Lien on Your Credit
Credit Score Implications: A tax lien can drastically reduce your credit score. "It's one of the most severe negative items you can have on your credit report," says Zambrano. The exact drop in points can vary, but it's substantial.
Challenges in Securing Credit: With a tax lien on your record, lenders may deem you a risky borrower. This perception can hinder your ability to get new credit or loans, and if you do qualify, you might face exorbitant interest rates.
Complications in Property Sales: Selling property with a tax lien can be a hassle. As Zambrano notes, "The lien often needs to be settled before a sale can be finalized, which can eat into your profits."
Duration on Credit Report: Tax liens used to linger on credit reports for seven years or more.?
Solutions: How to Address an IRS Tax Lien
Drawing from his extensive experience, Omar Zambrano offers several strategies:
Settle the Debt: "The quickest way out is to pay your debt in full," advises Zambrano. Once settled, the IRS will lift the lien within a month.
Opt for an Installment Agreement: If you can't pay all at once, consider an installment agreement. Zambrano adds, "In some cases, the IRS might agree not to file a lien if you set up a direct debit installment plan."
Propose an Offer in Compromise: This is a negotiation between you and the IRS to settle for a reduced amount. "If the IRS accepts, they'll release the lien once you fulfill the agreement's terms," explains Zambrano.
Seek a Certificate of Discharge: This doesn't erase the lien but removes it from a specific property. It's particularly useful if you're trying to sell.
Facing an IRS tax lien can be overwhelming, but with the right guidance, it's manageable. As Omar Zambrano, attorney at law, emphasizes, "It's crucial to address tax liens head-on. The longer you wait, the more complicated it becomes."
For those grappling with IRS tax debt issues, Omar Zambrano offers free consultations. Reach out at 626-338-5505 to benefit from his expertise and find a way forward.
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