What can the IRS put a lien on?

All assets including cars, home and other real estate, stock, bonds, and more. Having a lien on your assets makes it hard for you to use your assets as you please. For example, if you a lien is placed on your real estate, you will not be able to freely refinance the loan you have on the property until you receive a tax lien subordination or if you are able to discharge or have the lien withdrawn.

What is Trust Fund Penalty?

A Trust Fund in terms of employment tax should not be mistaken with a trust fund in terms of wealth management. This is the payroll tax amount assessed to the officers of the business. Tax resolution can help reduce and or arrange the payment of these taxes.

What is a Trust Fund Recovery Penalty (TRFP)?

A Trust Fund Recovery Penalty can be assessed if the unpaid trust fund taxes cannot be immediately collected from the business. This often happens if the business falls on hard times and taps into that fund for any reason. According International Revenue Code 6672(a) an individual can be held liable for penalty for willful failure to collect, account for, or pay to the IRS the taxes for the business.

Who is Held Responsible for the TRFP?

According to the IRS, the TRFP can be assessed against any person who is: responsible for collecting or paying withheld employment taxes, willfully fails to collect or pay the taxes.

Federal Tax Lien

What is a Federal Tax Lien?

A tax lien affects your financial assets, personal property and your real estate. It can vary based on your individual situation and are the government’s way of protecting their interest in the case that you fail to pay your tax debt in a timely manner. If you do fail to pay the IRS on time a lien will attach to all of your current or future assets until it is addressed. If you do not address the tax debt in a timely manner the lien may turn into a levy where the IRS has the ability to seize said assets.

What Are Assets?

Real estate property

Vehicle

(car, boat, motorcycle, etc.)

Bonds

Stocks

Cash

Bitcoin

Does a Tax Lien affect My Credit Score?

As of April 2018, all three tax bureaus (Equifax, TransUnion, Experian) removed liens from appearing on your credit report meaning that it should not affect your credit score whether or not it has been paid off. Although a lien does not appear on your credit score it still does need to be handled as they are still public records and may appear on other consumer reports.

How Do I Know If I Have a Federal Tax Lien?

The IRS has a filing process before sending out a notice. They will:

If you do not pay the tax bill sent by the IRS, that is when the IRS will send out a lien notice.

How to Avoid a Tax Lien

If you can pay the entire debt at once, this is typically the best option however, if you are having trouble paying the full amount of your tax debt due to financial stress, the IRS offers a multitude of payment options in order to avoid a lien.

Some options are:

Although it may seem like a federal lien may be looming, there is always an option available that may best fit your needs in order to avoid it. Visit our IRS problem resolution page for more services.

I Have Received a Notice, What Do I Do?

It may seem as though there’s no relief if you’ve received notice short of paying the entirety of your debt off but this is not always the case. There are a few routes you can take after receiving a federal lien. A couple of options to relieve yourself are:

To learn more about liens, check the following

Next Steps:

If you find yourself in danger of receiving or have already received a notice, the most important thing to remember is not to ignore it. There are many options to avoid or relieve a lien depending on your and your business’s circumstances. Call us today to discuss your options and the best way to move forward for your specific situation.