Lindsey Fein found herself in a scary tax situation. After learning her previous employer had failed to pay the state income tax for the last two years of her time there, she was faced with an IRS Lien. She did her best to mediate the situation alone and with her former accountant, but was able to make sense of what she owed to the IRS. 212 Tax was able to interfere on her behalf and help protect her credit score while creating a plan for repayment that worked for her.
If you’re facing a lien or other action from the IRS, it’s normal to feel anxious. While you might feel you’ve reached financial rock bottom, this is a temporary situation. If you take immediate action, you can quickly resolve the problem before it becomes worse. Here are three steps to take when faced with a tax lien.
1. First, understand what a tax lien is and what it isn’t.
The United States tax code is incredibly complicated, and even experienced accountants struggle to understand its ins and outs all of the time. Before you can begin to consider your options, you need to take the time to understand what a tax lien is, at least on the basic level.
A federal tax lien is simply a legal claim against your property that is the result of you failing to pay a tax debt. You will receive a lien after you’ve already received an initial notice from the IRS with how much you owe. If you fail to pay in a timely manner, you’ll receive a lien. The best way to get rid of a lien is to simply pay it outright. Once you’ve paid your debt to the IRS, the lien will be lifted in less than 30 days.
The worst part of a tax lien, in most cases, aside from owing the IRS, is the detrimental effect these derogatory marks can have on your credit score. That’s why it’s essential you take quick action to pay your debt, either independently or through a qualified advisor.
2. Don’t delay — take action now.
It’s normal to feel nervous about receiving a formal notice from the IRS. These situations are stressful for everyone involved, and it’s easy to think ignoring the problem will make it go away. Unfortunately, tax liens don’t resolve themselves until the debt has been paid in full. If you wait to take action, the IRS is liable to claim your assets and property. Take the stress out of contacting the IRS directly by working with a tax advisor who can take action on your behalf.
3. Remember you have options.
Once faced with a problem with the IRS, it’s easy to feel hopeless about your financial situation. Keep in mind that the IRS wants this problem solved as quickly as you do, and they’re usually willing to work with you to find a solution. You are not without options. If you believe you have reasonable cause or another outstanding circumstance, you may be able to file an appeal. A qualified tax advisor can help you explore your options for your particular lien.
Resolving a tax lien can be stressful, but it’s not impossible.
Taxes are complicated enough on their own. If you find yourself faced with an unexpected tax lien, it can feel like you’re out of options. It is normal to experience embarrassment and anxiety. Remember you don’t have to face the IRS alone. Speak to a qualified tax expert today about your options. Together with an advisor, you can determine the best plan of action for your situation.