The IRS has the right to protect the government's interest in all your property, including real estate, personal property and financial assets by filing a tax lien. Owing taxes is bad enough. But once the IRS files a tax lien, your IRS tax situation may get worse. We review important aspects of IRS tax liens.
Threshold Increased Due to Fresh Start Initiative
In 2011, the IRS Commissioner implemented the Fresh Start initiative. As part of the Fresh Start initiative, the IRS increased the dollar amount threshold for filing tax liens from $5,000 to $10,000. This means if you owe less than $10,000 in taxes, the IRS will generally not file a tax lien.
Click here for more information on the Fresh Start initiative
Installment Agreements for Balances Less than $25,000
The IRS will not file a tax lien if your balance is less than $25,000 in back taxes and a direct debit installment agreement is set up with the IRS. A direct debit installment agreement is when you agree to allow the IRS to automatically debit your bank account for the monthly installment payments.
If a tax lien is already filed and you owe less than $25,000 in back taxes, then set up a direct debit installment agreement. Once three consecutive direct debit payments are made, you can request for the tax lien to be removed.
Click here for more information on IRS installment agreements
Effects Your Credit Score
The IRS doesn't report tax liens directly to the credit bureaus. The IRS will submit a tax lien to your county of residence. The County Register of Deeds will record the IRS tax lien. The credit bureaus will obtain a list of all newly recorded liens from the County Register of Deeds, including tax liens. The credit bureaus will then report the tax lien on your credit report.
Make it Difficult to Get a Loan
Whether it is a personal loan, business loan, new mortgage or mortgage refinancing, obtaining a loan is increasingly more difficult when there is a tax lien on record.
Liens can be Removed, Discharged or Subordinated
There are several options on dealing with tax liens. We developed an eBook titled, 'The Comprehensive Guide on Tax Liens.' Included in the eBook is:
- How to remove an IRS Tax Lien
- How to address an IRS Tax Lien on your credit report
- How to obtain IRS Tax Lien withdrawal
- How to subordinate or discharge an IRS Tax Lien
- And much more!
Just fill out the form below to Download your Free copy of our eBook: The Comprehensive Guide to IRS Federal Tax Liens.
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