What Is a IRS Tax Lien? How to Stop a IRS Tax Lien?

Have you received a notice from the Internal Revenue Service (IRS) that you owe money? Are you unable to pay your debt? Is the IRS filing a tax lien?

In 2018, the IRS filed 410,220 tax liens. If you are one of these people, there are resources available for you. Continue reading to learn what to do when you are in this situation.

What Is an IRS Tax lien?

A tax lien means that the government is placing a claim on your property until you pay the taxes owed. Property claims can include any real estate, personal property, or financial assets you own.

Your property isn’t taken from you. This means that if you sell the property, the IRS gets to take the amount you owe out of your profits.

First, the IRS sends a Notice and Demand for Payment. If you fail to pay these taxes, they will file a Notice of Federal Tax Lien. This is the standard debt collection process for the IRS.

If you still fail to pay the taxes owed or make arrangements for payment, the IRS will proceed further. You will receive a Final Notice of Intent to Levy and a Notice to Your Right to a Hearing.

What Is an IRS Tax Levy?

The Intent to Levy process has two forms. These include the CP 90 or 297. Receiving this form means that the IRS has prepared to act. They can take the money you owe from your wages, commissions, bank accounts, real estate, or other assets.

You can avoid the fulfillment of the levy by taking immediate action. You must do something even if you can’t pay the tax debt. By acting on the letter, you can prevent ongoing levies and other negative effects on your financial future.

Begin by reading the whole letter. It tells you how much time you’re given to make a response. The letter will also include the total amount owed including penalties and interest.

The letter also contains other information about your case. In most cases, you’re given 30 days to act before the levy goes into effect.

What Happens When You Get a Tax lien?

Unanswered tax lien notices lead to the filing of a tax lien to protect the government. Taxpayers have the right and options to resolve their debt and get released from the lien.

Federal tax liens go into effect after the following steps are completed. The IRS determines how much you own in taxes.

They send you a tax bill called the Notice and Demand for Payment. The final step is your failure to pay the tax bill by the designated date.

Next, the Notice of Federal Tax Lien is filed as a public document. This can create financial problems such as making it difficult to get credit. Your choice at this point is to pay the bill or file an Offer in Compromise.

If you’re unable to qualify for an Offer, you may arrange an Installment Agreement. This allows you to pay your tax bill over time.

What Is IRS Wage Garnishment?

If you fail to pay your bill or your installment agreement, the IRS may garnish or take your income. Garnishment applies to hourly wages, salary, commissions, and bonuses. Your employer receives direct notification from the IRS and is legally bound to comply.

There’s a difference between wage garnishment by the IRS and other creditors. The IRS isn’t required to get a court judgment before taking your earnings. They may also take more of your money than other creditors.

The IRS must leave enough money for you and your family to pay for basic living expenses. A tax code table determines the number of exemptions you can claim and the amount you can receive. IRS garnishment can take as much as 70% or more of your income.

Can You Stop Wage Garnishment?

There are different methods for resolving your IRS problems. You must get in good standing with the IRS if you want to avoid or stop wage garnishment. You may either pay what you owe or agree to a payment plan or other resolution.

The following are some options to relieve your tax debt.

Installment Agreement

An approved installment agreement means that you will pay a set monthly amount until the debt is paid off. If you make these payments on time, you can avoid wage garnishment.

Make an Offer in Compromise

There are some cases where the IRS will agree to let you pay less based on your financial situation. This type of relief only applies to certain situations. It’s worth exploring this option.

Uncollectible Due to Financial Hardship

If you show the IRS that paying your tax bill will take away your ability to meet your family’s basic needs, they may stop the garnishment. This is a temporary stoppage of collections that may last months or even years.

Change to a New Employer

When you change jobs, it takes the IRS a while to find the new employer. They must then issue new wage garnishment notices. This is only a temporary strategy.

Quit Your Job for a While

Quitting your job for a while stops your income. Thus, the IRS can’t get any money. You, however, will not receive any income either.

When you return to work, it may take some time for the IRS to learn that you’re working again. They will then resume garnishing your wages.

File for Bankruptcy

Bankruptcy doesn’t erase tax debt. Filing bankruptcy interrupts the wage garnishment during the bankruptcy process. This may help with other debts as well.

File a Tax Levy Appeal

If you feel that the tax levy is incorrect, you can file an appeal. You can file an appeal even after the 30-day limit has passed.

Do You Have Tax Questions?

Are you feeling overwhelmed by the tax process? Do you have a tax lien or levy against you? If so, it’s time to get help.

Fidelity Tax Relief is here for you during times of trouble. Many Americans have experienced problems with the IRS at some time. If you owe back taxes, our proven tax debt relief strategies can help you.

Our office has over 20 years of experience working with the IRS on behalf of our clients. We also work with state tax agencies as well. Let us find tax resolutions and avoid garnishing of wages, tax liens, and levies.

Contact us today to receive a free tax consultation.

Time is running out!​

When you owe money on your federal taxes, one of the common collection actions taken is IRS tax garnishment, typically on your wages or salary. Wage garnishment can leave a person with very little money on which to live. 

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