Failing to pay your taxes can create many problems, some of the problems that it can create include the IRS placing a lien on your property to ensure they are paid back. A tax lien essentially makes it impossible for you to sell or refinance your home until the IRS is paid. If you cannot resolve the situation with the IRS and keep ignoring them, they will take further action by filing a notice of tax lien. Once this is filed with the county recorder and available to the public, it can make it very difficult for you to sell your home or get financing in general. Thankfully there are some steps you can take to remove an IRS tax lien and help remedy the situation so that it does not continue to have negative consequences. Let’s explore how you can remove an IRS tax lien from your property and get back on track with taxes again.
Understand the IRS Collection Process
The IRS collections process is similar to a debt collection agency—but with a major difference. While private debt collectors are regulated, the IRS does not have any specific rules or laws that govern their collection process. As a result, you could find yourself facing threats and intimidation from the IRS that most people would not expect from a government agency. The IRS collection process begins when you fail to pay your taxes. The agency will then file a Notice of Federal Tax Lien, which is similar to a security interest. This gives them the right to seize any of your assets that are worth more than $5,000. This means that they can go after any money or property you have, including your house or car.
Create a Plan to Deal With Your Taxes
The first thing to do is to create a plan to deal with your taxes. You do not want to let them go unpaid—but you may be dealing with an unexpected hardship, such as a medical emergency or job loss. It is important that you contact the IRS as soon as possible so they know the situation and you can set up a payment plan. In many cases, you can apply for a payment plan that will let you settle back taxes over a set period of time. It is important to remember that the longer you wait, the more difficult it will be to negotiate a payment plan. In some cases, it is better to contact the IRS immediately.
Sell Your Property and Pay Back Taxes
If you have a large amount of taxes due, then selling your property is a good way to pay them back. You can do this with a simple contract for sale, which lets the buyer take over your existing mortgage and pay you the equivalent amount to what you owe on the house. Once the buyer has paid off your mortgage, you can sign the title over to them. In many cases, the buyer will be interested in buying your house even if you have a tax lien against it. However, there are some things to keep in mind before you sign on the dotted line. You can search online to find out the details of the tax lien and how long it will take to remove it. You can also use sites like Tax Lien Solutions to help you find interested buyers.
Clear Up Any Discrepancies in Your Tax Return
If the IRS has filed a tax lien against you for an amount that is significantly higher than what you actually owe, it is possible that there is an error in your tax return. This may be something as simple as a typo in your name or social security number. In many cases, you can talk to a IRS representative to find out what the issue is and clear it up. If you cannot resolve the issue with your tax return, you may need to file an amended tax return to correct the error. This will allow you to lower the amount you owe and help you get a lien removed from your property.
Install an IRS Lockbox to Stop Collection Efforts
Once the IRS has filed a lien against your property, it is difficult to stop collection efforts. However, if you can prove that you are financially unable to pay back taxes, then you can stop collection efforts. To do this, you will need to prove that you have a significant financial hardship that impacts your ability to pay back taxes. There are two ways you can do this. The first is to get a letter from your doctor, which certifies that you are unable to work. The second is to file for bankruptcy protection.
A tax lien is a serious matter. If you have failed to pay back taxes, there are options available for you that can get you back on track! With sufficient knowledge and the appropriate strategies in place your tax debt can be reduced putting you in a better position to keep your assets and be free of any ongoing problems with the IRS. If you are unfamiliar with how you can make this possible! Reach out to Brightside Tax Relief! We are here to assist you every step of the way and get you back on track! Seeking professional assistance when dealing with a Tax Debt matter is definitely the route to take!