You’ve had a balance due to the IRS or state and now the government is after you. After numerous letters and threats, you finally receive a notice of lien or, perhaps worse, a levy. There is still time to get help and deal with these issues – contact our office as soon as possible and get started.
If you have delinquent taxes, and have failed to reach an installment agreement, the first thing a collection bureau will do is usually to attempt a wage garnishment. The Internal Revenue Service will do this by mailing a Notice of Levy to your employer or, in some cases, vendors who contract with your business. If this happens to you, it is essential that you contact a tax professional immediately. In many cases, the IRS will send your employer a table to help calculate the proper amount to withhold from your paycheck, and a mistake in the calculation can leave you with nothing left to pay the bills. If you’ve filed all recent tax returns and your case hasn’t been assigned to a Revenue Officer, an experienced tax attorney can usually release the levy within 24-48 hours. If there are missing returns or an agent has been assigned, you will need to prepare and file any required returns and put together a case demonstrating why the levy must be released immediately.
Another favorite collection tactic employed by the IRS is the bank levy. In this case, you will receive a letter or other communication from your bank informing you that your account has been frozen. The bank will hold the contents of the account for 21 days before sending the money to the IRS. If your account has been affected by a bank levy, contact us immediately to prevent the forfeiture of your account, which may be necessary to pay essential living expenses.
A lien is a document filed with local governments (usually the county recorder) that provides public notice of unpaid taxes. A lien will affect your credit score and prevent the sale of assets with recorded title, especially real estate. Liens show up on your credit report and will also appear on your home’s title report. If a lien has been filed and you need it removed, you’re going to need experienced help to repair your credit-worthiness or sell your property. Practically speaking, your options are to have the lien released, withdrawn, discharged or subordinated.
The only way to have the lien released in most cases is to (a) pay the balance in full; (2) settle the debt with an Offer in Compromise; or (3) enter an installment agreement if your balance does not exceed certain thresholds. A released lien will still appear on your credit report, but there are steps one can take with the credit bureaus to mitigate the situation. If your lien was filed by the IRS, you may be able to apply for a lien withdrawal, which will delete the lien from your credit report.
Even if lien release is not an option, there are still ways to work with the IRS and state tax bureaus to get your house sold – particularly if you’re dealing with a short sale or impending foreclosure. Our office will contact the tax bureaus and negotiate a lien discharge, which, in practice, results in a commitment letter from each tax bureau promising to release the lien once it receives confirmation of the sale. There may be other requirements depending on your individual situation. Please contact our office to learn more about how we can help solve the issues created by your tax liens.