Fear will start to creep into the mind for many people whenever they have to deal with IRS. The event may become very stressful for anyone that can turn quite bad, if the IRS choose your file for an audit. The IRS can file a tax lien for a number of reasons and many people are wondering what they can do to stop them. If you can learn what these reasons are, you can stay out of the IRS's headlights. In this article, we'll discuss the top reasons that cause the IRS to file a tax lien.
Before going into the reasons, you must first understand what a tax lien is. A federal tax lien is a legal claim against your assets if you have unsettled taxes to the IRS. The notice is much like an announcement to the world stating that you owe taxes to the government and these records will be available at the state court house or the county recorder’s office. Once there is a lien filed against you, a lot of tax resolution promoters will contact you through e-mail or telephone guaranteeing that they can help you to get rid of this lien. Be careful with whom you do business with, since they can put you in a worse situation than you started. A tax lien not only impacts your credit rating but also your reputation. To stop this from happening, there are certain steps that you must carry out as early as possible.
The first thing you should watch for is a ‘Notice of Intent to Levy’ letter from the IRS. Once the IRS sends this letter, they will wait for only 30 days for your response. After that, there won’t be any hesitation in filing a tax lien against you. Therefore one should respond immediately as soon as they receive the notice. There are many cases where the IRS has actually filed a tax lien well before the taxpayer received his/her intent of levy letter.
The greatest way to avoid an IRS tax lien is to simply pay off your tax debts. Every credit reporting agency can learn about your tax lien and will act accordingly. Your credit rating will get dramatically affected (shed close to 100 points) if a tax lien is filed against you. A tax lien can restrain the use of your property if you get equity interest from it. If you don’t want to face these kinds of tough situations, always check for any IRS mailings and act promptly when you get one.
An IRS tax lien is a serious matter which should not be considered lightly. They love to use every tactics in their book to collect the pending taxes and their every step can have significant impact on your earnings and reputation. If you receive the notice, contact the IRS immediately to find out more about the options available to you. The procedure for avoiding a tax lien is much simpler than looking for solutions to cope with it later. Just clear your pending taxes and stay away from all the hassles involving the IRS. Though it’s hard to deal with them, a few simple steps can protect you from the actions of the IRS.