What is a Tax Lien?

Hey there,

Have you ever thought about what happens to the assets and properties of those people who deliberately avoid paying taxes? Do you think their assets are seized in an instant? Well, I surely used to think like that until I came to know about the concept of Tax lien. I am sure not many people are aware of tax lien certificates. But do not worry, I will tell you all about it and also tell you the answer to the question I raised here for you.

What is a Tax lien meaning?

When an owner is behind on their taxes, the government may issue a tax lien on their property or other assets. Municipalities may offer tax liens for sale to financiers, who in exchange for payment of the tax bill receive the right to recoup the tax amount plus interest from householders.

A tax levy could follow if you don't deal with a federal tax lien. The ultimate confiscation of assets to pay unpaid taxes is known as a tax levy. Garnishing your salary, confiscating possessions, and freezing bank accounts are just a few examples of tax levies.

What does it mean if you have a tax lien?

• Your credit standing can deteriorate. Even though tax liens are no longer reported to credit bureaus, the IRS can still publish a notice of the tax lien, notifying creditors that the government has a claim on your property.

• It can compromise the selling or refinancing of a house. Title searches frequently turn up tax liens. You'll probably need to utilise some of the equity in a home you're attempting to sell or refinancing to file your taxes in an attempt to close.

• You can end up paying dearly in time. Many past-due taxpayers are routed to the IRS' computerised collection system, or ACS, which can result in hours of waiting on hold with the contact centre. He continues that some taxpayers would be paired with a tax officer, which might entail in-person visits.

• A tax levy can be the result. The IRS could then issue a Notice of Intent to Levy if you don't settle your back taxes after the IRS filed a federal tax lien.

I hope you now understand what are tax lien certificates.