Federal Tax Lien Limitations

By dhinternational  /  July 3, 2013 / Comments Off on Federal Tax Lien Limitations

Federal Tax Lien LimitationsYour ability to borrow money is completely taken away from you when the IRS would put a federal tax lien on your credit.  You absolutely have no chance of getting any type of financing or acquiring a loan until the tax debt is paid.  You must know that a lien is quite difficult to remove unlike other tax collection actions such as a levy and wage garnishment.  The goal of the IRS to file such a thing is to get the taxes owed to them.

As powerful as the federal tax lien may be, there are still limitations to what it can do.  Keep in mind that there are important procedures that must be followed for both parties.  The IRS is a bureaucracy and they must accomplish a few things before hitting you with a tax lien.  Here they are:

a. Assessment of income must be conducted.  If you have already declared for bankruptcy, then there isn’t any use of implementing a tax lien against you.

b. An agreement to demand for payment must be reached with you and the IRS.  They must make an effort to do this before imposing a lien, and beginning any type of involuntary tax debt collection.

Always remember though that a federal tax lien would remain in effect until your tax debt has been paid in full.  There may also be certain circumstances that would require for the removal of the lien.

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