Federal Tax Lien

Liens give the  IRS legal claim to your property as security or payment for your tax debt. A Notice of Federal Tax Lien may be filed only after:

  • The IRS assesses your liability,
  • The IRS sends you a Notice and Demand for Payment – which is a bill that tells you how much you owe in taxes, and
  • You neglect or refuse to fully pay the debt within 10 days after the IRS notifies you about it.

Once these requirements are met, a lien is created for the amount of your tax debt. By filing notice of this lien, your creditors are publicly notified that the IRS has a claim against all your property, including property you acquire after the lien is filed. This notice is used by courts to establish priority in certain situations, such as bankruptcy proceedings or sales of real estate.

The lien attaches to all your property (such as your house or car) and to all your rights to property (such as your accounts receivable, if you are a business).

Once a lien is filed, your credit rating may be harmed. You may not be able to get a loan to buy a house or a car, get a new credit card, or sign a lease.

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