When tax liens are filed on businesses

On Behalf of | Feb 21, 2020 | Tax Liens

When Connecticut residents fail to pay their taxes, the government can do a number of things in order to collect the money owed. One of those things is placing a tax lien on one’s home or other property. What if someone fails to pay business-related taxes? Yes, tax liens can also be filed on one’s business.

A tax lien is a legal claim against one’s property. It is the IRS’ way of letting creditors know that they have first dibs on seizing property if taxes, fees and penalties are not paid in a specific time frame. So, if business taxes are not paid, the IRS can seek to sell off one’s company or company assets in order to collect what it is owed. In some cases, personal assets may also be seized and sold.

Before a tax lien can be issued, however, the IRS has to send a “demand for payment” letter and allow the recipient at least 10 days to respond or make payment. If no payment is received, the lien may be issued. There are several ways to have this type of claim removed:

  • Pay the debt
  • Seek withdrawal of the lien — available under certain circumstances
  • Set up a payment plan
  • Seek lien subordination

Once tax liens are filed against businesses, the sooner company owners address them, the better. There is no one-size-fits-all approach to having liens removed. An experienced tax attorney can assist Connecticut residents in addressing their lien issues in ways that best benefit their particular circumstances.