According to the dictionary, a lien is the right of a creditor to take possession of someone else’s property until that person’s debt is paid or discharged. When it comes to taxes, the government has the right to take one’s property if taxes are not paid. Connecticut residents who are facing tax liens may have options to deal with the situation before it becomes a significant issue.
If the government issues a tax lien, how does one get rid of it? There are three basic ways to deal with this type of issue; first is to pay the debt — easier said than done if money is tight. The second is to work out an offer in compromise with the IRS — which simply means that a payment plan is reached for all or a reduced amount of the taxes owed. Finally, the third is to consider bankruptcy. Taxes may be discharged if the circumstances are just right.
What kind of property can the government take? The IRS has the right to seize just about anything in order to collect funds. Commonly seized assets include:
- Investment accounts
- Bank accounts
- Real estate
Tax liens are no joke. It is better to address one’s tax issues before it gets to that point. An experienced tax attorney can assist Connecticut residents who are dealing with tax troubles in finding ways to solve their problems so that the government does not take such drastic measures to collect. If a tax lien has already been filed and property seized, one’s legal counsel can help find a solution in such a situation as well.
Source: investopedia.com, “Tax Lien“, Accessed on April 6, 2018