Taxes are compulsory to be paid but not everyone pays tax. Some intentionally try to evade tax while some just meet themselves in situations that make them unable to pay taxes. If you are unable to pay a tax debt, I need you to know that you are not alone. About 17% of federal taxes are not paid every year. Government immediately file tax liens to people that are known not to have paid their taxes. It is definitely going to make you unsettled immediately you receive notice of a tax lien.
WHAT IS A TAX LIEN
Quite simply, a tax lien is a claim by the government to seize your property because of failure to pay your tax over a particular period of time. Personal property, real property, and even financial assets are all among the things that can be seized by the government. Federal, state, and local governments all have the jurisdiction to file tax lien.
WHEN IS A TAX LIEN INTRODUCED?
A federal tax lien is introduced after the below comes to place:
1. The IRS will firstly assess your liability (This is when the IRS gets to know how much you owe)
2. The IRS then sends you a bill indicating and elucidating the amount of money you owe. (Notice and Demand for Payment)
3. You still decide not to pay the debt after receiving the bill.
After the above happens, the IRS immediately decides to file a tax lien.
TAX LIEN REPAYMENT PLAN
• INSTALLMENT AGREEMENT: - The tradition IRS payment plan requires you to pay your entire debt within 60 months. Apart from the amount due to be paid, interest is also added as penalty. All that is required of you is to know your balance and divide by 60. Then request for an agreement to pay monthly.
• PARTIAL PAY INSTALLMENT AGREEMENT: - Partial pay installment agreement can also be requested by you. This plan is best for people that cannot pay full within the 60 months.
• FRESH START WITHDRAWAL: - Not everyone is lucky to get this, but you can always try your luck. You can request for a lien withdrawal via the IRS Fresh Start program.