Federal Tax Liens are documents filed by the IRS which basically secure your property as collateral for a debt owed to the government. A Federal tax lien will not be filed until you have been sent a Notice and Demand for Payment. This Notice is a legal document that advises you that you owe taxes and the specific amount of the money owed. It is customary to be given 10 days to gather the funds needed to satisfy the debt, or in the alternative, make payment arrangements for the satisfaction of the debt.

Foreclosures By State

If you are served with a Federal Tax Lien, it will undoubtedly affect your credit rating, so it is wise to do everything in your power to get rid of this debt as soon as possible. And be aware that many states add additional fees to get a lien removed from your property. That process makes your liability increased, so use it as motivation to secure financing to pay off the debt in the time frame allotted by the government.

A little known fact about federal tax liens is that if 10 years pass and the lien is not forcibly released it will automatically disappear from your record if the IRS does not refile another Federal Tax Lien. Also, if you satisfy all the costs inherent within a tax lien, and the government fails to release the lien from your record within 30 days of the satisfaction of the debt, you do have legal recourse and can sue the IRS for failure to release the federal tax lien.

If you and the IRS enter into a payment arrangement and you dutifully keep to the repayment schedule, you may request documentation from the IRS proving the debt amount is decreasing. You may need this document to help your credit score, particularly if attempting to arrange for a car loan or other big ticket items that would require a creditor to seek your credit history.

There is an appeal process for the consumer once a Federal Tax Lien is filed against your property. You will receive documentation that a Federal Tax Lien has been placed on your property and the notice will also have a date with which an appeal can be filed. There are several valid reasons to file an appeal and these reasons include:

1. IRS procedures were not conformed to and the lien was filed earlier than promised;


2. You were not given the option to make alternate payment arrangements;


3. You had filed bankruptcy.

There are several ways to properly take care of the effects of a Federal Tax Lien, and it is definitely in your best interest to do so as a Federal Tax Lien can hurt your good name significantly.