Have you failed to pay your tax bill? Have you received letters from the IRS? Are you wondering what to do next?

First, understand that ignoring it will not make it go away. You must act at once. This article will provide a guide for the process of removing tax liens.

What Happens When You Have a Tax Lien?

If you received a letter or notice from the IRS telling you that you owe taxes read all the instructions. It’s best if you’re able to resolve the debt by completing the requested tasks.

If you can’t pay the debt, it’s beneficial to talk with an experienced tax consultant. They help you gather information and evaluate the situation.

These experts will decide if you should take immediate action. When the IRS plans to place a levy or garnish wages, the consultant can address this situation in 24 hours.

IRS Tax Lien

IRS Publication 594 defines the tax lien process. When the IRS declares a tax lien, they place a claim on your property. This happens if you don’t pay your first tax bill.

The IRS can file this lien with your employer, landlord, and creditors.

IRS Tax Levy

The Bureau of the Fiscal Service (BFS) collects tax debts through the Treasury Offset Program (TOP). When a tax bill isn’t paid, the IRS provides an electronic file with the tax debt data to TOP. They enter it into their database.

The BFS compares federal tax payment information to information in the TOP database. When they find a match, BFS notifies the IRS. 

You have several options in response to a tax levy. The IRS will send you the following information:

  • The amount of your tax bill
  • A statement of the IRS’s intent to levy
  • An explanation of your rights to appeal
  • The IRS telephone number where you can ask questions and get help

The levy goes into effect if there are no payment arrangements made within 30 days. At this point, it’s often best to talk with the tax consultant.

IRS Wage Garnishment

If you owe taxes and have a tax lien or levy, the IRS may begin garnishing your wages. This means that the IRS gets a certain amount of your paycheck each payday.

The Consumer Credit Protection Act (CCPA)’s Title III defines what the law considers earnings. They are any “compensation paid or payable for personal services”. Any payments you get as part of an employment-based disability plan also qualifies.

The following provides examples of payments including those received as lump sums.

  • Commissions
  • Bonuses that are either discretionary or nondiscretionary
  • Profit-sharing
  • Sign-on or referral bonuses
  • Relocation or incentive payments
  • Awards for cash service, attendance, or safety
  • Retroactive merit increases
  • Holiday work payment
  • Workers’ compensation
  • Termination pay including accrued benefits
  • Severance payments
  • Insurance settlements

Only earnings received for providing job-related services are subject to the CCPA.

Removing Tax Liens

So, what steps should you take to reach a tax resolution?

1. Hire a Tax Consultant

A tax professional may be a lawyer, CPA or enrolled agent. They represent your interest to the IRS or other agencies. These experts provide advice, options, and help you navigate the tax resolution process.

2. Make Contact With the IRS

Never ignore a notice from the IRS. Follow the instructions in the letter and the recommendations of your tax consultant.

A tax lien is a serious situation. A lack of response makes the consequences worse.

3. Prevent the Recording of a Federal Tax Lien Notice

When the tax lien process begins, it’s not part of the public record. If you have not paid the bill or made arrangements for payment, the IRS can file a federal tax lien notice. Now the document is part of the public record at your local courthouse or the secretary of state’s office.

4. Appeal the Tax Lien

If you believe there’s a mistake with the tax lien, hire a CPA or tax attorney. They can determine if you have grounds to appeal the lien. You must take care of this before the 30-day deadline.

5. Pay Your Debt in Full

The quickest way to resolve tax debt problems is to pay the entire bill. If you don’t have enough money available, consider the following options:

  • Sell some of your property
  • Withdraw money from a retirement fund
  • Take a loan such as a home equity loan
  • Use a credit card

Discuss these options with your tax advisor. It may be better to work with the IRS on a compromise.

6. Make an Offer in Compromise

The IRS has a Fresh Start program to help those who have trouble paying their tax debt. One option is to make an Offer in Compromise. The tax consultant negotiates with the IRS to calculate the lowest acceptable offer.

The goal is to agree upon a lower amount you can pay in a certain amount of time.

7. Establish a Payment Plan

The Offer in Compromise targets taxpayers with significant financial difficulties. If accepted by the IRS, your tax bill is reduced.

You may not qualify if you own a substantial amount of property such as a home, new cars, savings accounts, or a 401K. It may be more realistic to apply for an installment plan or other tax resolution programs.

8. Ask for a Release from the Federal Tax Lien Notice

The Fresh Start Program includes relief measures that can remove the tax lien notice from the public record. This means that once your debt’s resolved, you can ask that the IRS release the lien and clear your record.

Do You Need Help with Tax Lien Removal?

If you have received notices or letters from the IRS, take action at once. Fidelity Tax Relief can help you in removing tax liens. You can call our helpline and speak with a tax resolution specialist.

Our specialist will determine if there’s a tax code that can help resolve your problems. We work to protect your assets, decrease your stress, and save you money.

Call the Fidelity Tax Relief Helpline today to speak with a tax resolution specialist.