There are numerous tax obligations that a taxpayer must conform to. Ranging from capital gains, and income taxes, the IRS targets everything because they want the taxes paid. If you operate a business, or you have some assets, own a home or operate a business, if you fail to pay your taxes or fulfill your tax obligations, several agencies will come down hard on you. These agencies include the CDFTA, FTB, EDD, and internal revenue service (IRS). These agencies are known to use measures that are aggressive to collect tax from people who default.
A tax lien is not a good thing in your record and in most cases you will need a tax attorney to help you out. Such a record will lower your credit score and cause other problems such as harming your business and complicating the sale of homes. However, there is hope depending on how you address the lien. It is not all gloom and dark if you are a defaulter, if you get the right tax lien attorney, you can emerge from this problem better than before.
Having a tax lien is a big problem for your finances. However, if you have a skilled tax lien attorney, it is possible to get tax lien released and avoid the consequences associated with tax problems. Here is some more info about how tax liens work, when they are applied, and how you can get the lien released:
What is Tax Lien?
One of the most important things is to know the difference between a tax levy and a tax lien. If you want assistance with a tax levy, an IRS tax levy attorney can help you with that. On the other hand, tax liens take a very different turn. A tax levy refers to the specific size of property or funds required to service an unpaid debt, but a lien is a claim imposed on your property.
The purpose of imposing a lien is to make sure that the taxing authorities have some level of control over your assets. The property can be your vehicle, homes, or a piece of land that you own. The liens are put to use when the taxpayer fails to honor federal income debts. For the IRS to create a tax lien, three conditions should happen. These conditions include:
- Tax Liability – The IRS must assess how much tax they should get from you before imposing a tax lien on you. It is a process they call putting your balance due on the books.
- Notification – The IRS should inform you formally of tax liability. The document is also known as Notice and Demand for Payment. It explains the amount you owe the federal government, the source of the dues and other pieces of important information. If you fail to acknowledge and respond to CP501, the next step is to receive CP502 as a follow-up.
- Notice of Federal Tax Lien – If you do not pay up after receiving these notices, the IRS files the Notice of Federal Tax Lien. This notice is available to the public and creditors can access it, as well.
Many debt collection companies buy the database listings, and that is the reason why you might find your email full of junk mail once you are a defaulter. The only bad news is that most debt resolution companies do more harm than good in terms of getting your lien released.
States are known to use aggressive methods to collect taxes. They are more stringent in terms of payment compared to the federal government. It makes it very difficult to deal with state governments, thus denying a lot of people a chance to maintain a reasonable living standard. A tax lien attorney helps in leveling the playing field. A tax lawyer fully understands how to get a lien released as well as the process under which the tax law applies.
Taxes are difficult to deal with for many taxpayers. It becomes a burden when a tax lien is imposed, especially on business owners. A tax lien attorney can help you deal with these inconveniences.