Things to know about tax liens

On Behalf of | Nov 23, 2018 | Tax Liens

Connecticut residents who have found themselves in the position of being unable to meet their tax obligations may have found themselves in trouble with the Internal Revenue Service. How exactly? They may have received notice that tax liens have been filed against them. Here are some things people need to understand about tax liens.

First, let’s talk about the purpose of a tax lien. A tax lien allows the government to claim a person’s property if he or she fails to pay taxes due. This basically gives the government first dibs on property should any other creditors come looking to collect on unpaid debts.

Second, let’s talk about tax liens and one’s credit. A tax lien can affect one’s credit. If put on one’s credit report, one may struggle to obtain loans or lines of credit until it is removed. Getting a lien removed can take time and persistence. The IRS is supposed to removed liens within 30 days of the debt being repaid, but that does not always happen.

Third, and finally, let’s talk about how to approach the IRS about tax liens. If one receives notice of tax lien or notices one placed on his or her credit report, it can be tempting to call the IRS as soon as possible. One must be very careful about how this type of situation is approached. It may be better to seek legal advice before contacting the IRS.

Tax liens can wreak havoc on one’s personal and, sometimes, professional life. The potential impact on one’s financial situation can be significant. Connecticut residents who are faced with a tax lien can help themselves by seeking information and guidance about the issue before confronting the IRS about it.