What Does a Tax Lien Mean?
A tax lien is something most people have heard of, but if pressed on the issue, many don’t really know what they’re all about. While that’s a good thing and probably means that you’ve never had a lien levied against your property before, it can come as a serious shock when you find out you have to handle one. Learning how to find out if you have a tax lien can save you a lot in fines, interest as well as prevent the IRS or State to seize your assets or funds from your bank account.
The good news is that taking care of a tax lien is something you can tackle. In some cases, the lien may also have been reported in error, which is generally easy to clear up. Use this guide to learn more about tax liens and how to find out if you have against your property.
Left unattended, a tax lien can result in the government taking money directly out of your bank account or garnishing your wages. Getting any sort of credit may also be very difficult when you’ve got a lien on your property. Avoid these problematic situations by doing your homework and tackling your lien right away.
What is a Tax Lien?
A tax lien is what happens when the government puts a claim on your property due to failure to pay taxes. Typically, your government agency will send a letter to you before actually placing the lien, asking you to pay back taxes or simply file your tax return for a past calendar year. Even if you do not owe taxes, a lien may be placed against your property if you do not file a return at all.
After sending a letter about payment due, the government agency typically places a lien against your property. This may go along with a lien against earnings you make from any type of employment. It is the government’s legal right to do this if you are not paying your taxes or filing your tax returns at all.
How to Perform a Tax Lien Search
- Contact the IRS. While local and state government agencies can put a lien against your property, most tax liens that individuals deal with are placed by the federal government for tax payment issues.
- Get in touch with your state board of equalization if you’re dealing with a tax lien that has been placed on a business property by your state or local government. Individual states like California all operate their own board of equalization.
- Use a third-party website to begin your property lien search. These can be useful when you’re trying to find out if there is a lien against your property or if a lien you dealt with is still showing up. You may also be able to get basic information about tax liens on other properties via third-party websites.
Figuring out if you have a tax lien against your property is often a simple process since you’ll likely be notified by a government agency. However, there are cases where you may be living at a different address or your notices simply do not make it to you. The preceding list how you can perform a tax lien search
How to Remove a Tax Lien
- Verify that the lien is legitimate. Government agencies can make errors on these issues.
- File any outstanding tax returns. If you do not owe money for the year in question, your lien will be removed once your return is filed.
- Pay your tax bill. You can do this in a lump sum if possible, which will generally result in your lien being removed as quickly as possible. If you cannot pay in a lump sum, most government agencies will work to put you on an installment plan you can afford to get your bill paid down.
- Request that your tax lien is removed once you’ve paid your bill or resolved your tax issues. You may need to do this in writing. Check your records after your request to make sure your tax lien is not still visible on your credit report.
Removing a tax lien is generally a relatively simple procedure, though you will likely need to deal with a government agency to do this. The list above are some ways you can begin to get your tax lien issues resolved.
How Long Does a Tax Lien Search Stay on Your Credit Record
A tax lien will typically show up on your credit report, which can make it very hard to buy property, get a credit card or handle basic needs like getting a car. You may also have a harder time getting employed by a company that runs a background and credit check since a person with a tax lien levied against they may be a financial risk.
While some states have statutes of limitations regarding collections, these can vary and be long enough to cause you serious problems. In most cases, simply paying your tax bill, making installment arrangements or requesting that an old solved lien is removed is your best course of action.
A tax lien can wreak havoc on your life, so getting yours resolved quickly is of the utmost importance. Follow this simple guide and you can get back to living a life free of debt and the fear of garnished wages or frozen assets. Knowing how to find out if you have a tax lien can certainly ease the concerns about past due or unpaid taxes.