When can the IRS place tax liens on property?

On Behalf of | Apr 26, 2019 | Tax Liens

This year, a number of Connecticut residents found themselves facing tax bills that they could not afford to pay. Since the deadline to file and pay taxes has come and gone, those who failed to apply for extensions probably have a lot of concerns about what the government can do to them if their tax bills do not get paid in the coming months. The simple truth is, if taxes never get paid, the Internal Revenue Service has the right to place tax liens on personal property.

When a tax lien is issued, it means that the government has a legal claim to one’s property, including one’s home, vehicle, financial assets and any other valuable personal property. Now, just because taxes were not paid on time does not mean that a tax lien can be automatically issued. First, the IRS must assess and officially document one’s tax liability. Then, a tax bill must be sent seeking payment. Finally, one must fail to pay the debt in full by the deadline listed on the tax bill.

If tax debt is not paid in full or one fails to work out a payment plan with the IRS, the government can then file a Notice of Federal Tax Lien. This allows credit reporting agencies to put a government tax lien on your credit record, which can have a significant impact on your credit score and ability to obtain lines of credit. There are a number of ways to remove a lien from one’s credit profile. Legal counsel will have the ability to review the finer details of a specific situation and provide a list of available options.

Tax liens can do a lot of damage. They can destroy credit. They can cause a person to lose personal property. Connecticut residents who find that the IRS has issued tax liens against them can help themselves by seeking the assistance of an experienced tax law attorney who will be able to aid them in resolving the issue as swiftly as possible.