1548 The Greens Way – Ste. 4 Jacksonville Beach FL 32250
Owing taxes to the IRS (Internal Revenue Service) or Florida state government is stressful and can result in actions like tax liens on your property. Tax liens can cause significant financial hardship and can even result in the property being seized if left ignored. In the meantime, it can impact your ability to get credit or sell the property. One way to avoid the long-term financial consequences is to get the lien removed as quickly as possible.
The state or federal government can place a tax lien on your property. When an individual owes back taxes, the government will put this lien on the property, claiming it as potential compensation for unpaid debts. Property that could be put under a tax lien includes:
If those debts continue to be unpaid, the government can issue a tax levy, which then takes the property from you as compensation. Even if the property is foreclosed, the tax lien remains.
Tax liens are automatic when you haven’t paid taxes and meet specific requirements. The state or federal government must first:
If you have missed any tax payments, you likely have a tax lien on your property and should have received a notice in the mail. You can check with the IRS or your county to determine if there is a lien on your property.
There are several consequences that a tax lien can have if you continue to not pay your tax debts. This includes:
It’s important to work to get a tax lien removed as soon as possible. It can be helpful for many taxpayers to work with a Jacksonville, FL, Tax Lien Attorney to quickly assess their options for tax debt and removing liens.
The most straightforward way to remove a tax lien is to pay off all outstanding debt. You can prevent more severe penalties, like a property tax levy, by paying off tax debt and interest and ensuring that the tax lien is removed and debts are settled.
The reason many people get into tax debt in the first place is because they are unable to pay it. You can also set up a payment plan if you are unable to cover your debts. This allows you to avoid other penalties and get the lien removed.
Another option includes an Offer in Compromise. If you qualify, this allows you to settle your debt with the IRS for less than you owe. You can file for an Offer in Compromise for one of the following reasons:
You can also ask for a withdrawal of the notice of federal tax liens. The notice is in the public record of the lien, which can make applying for credit difficult. A withdrawal does not forgive your outstanding debt. You may be eligible for a withdrawal for one of the following reasons:
If the debt liability has been satisfied, and the lien has been released, the general requirements for withdrawal eligibility include:
There are additional eligibility requirements for taxpayers who have entered into a Direct Debit Installment Agreement.
The most effective way to get rid of a tax lien is to pay your full tax debt to the state or federal government. A federal tax lien will be released within 30 days after a tax debt is paid in full. In some circumstances, there are other options available for taxpayers, such as a withdrawal or a discharge of property.
If a tax debt is left unpaid, tax liens have a statute of limitations in Florida. Tax debts can only be collected before the lien has expired. If the certificate has been sold, the taxpayer has contested the legality of the lien, or the property is under a homestead exemption, the statute of limitations is 20 years. Otherwise, the statute of limitations is 5 years. The statute of limitations begins from the date the tax was assessed or the date it became delinquent, whichever came later. Once the statute expires, your debt is cleared. A federal tax lien has a different statute.
The most effective way to stop a tax lien sale is to pay the taxes that are owed, as well as late fees and interest. By the time a property is up for auction, there has likely been a tax lien for some time. Properties are seized through tax levies to cover debt, which may then be put up for auction.
Yes, a federal tax lien expires. The statute of limitations on IRS tax liens is 10 years. After that time, the lien is removed and the debt is cleared. Unfortunately, it’s likely that, before the lien expires, the IRS will take more significant steps, such as tax levies or wage garnishment, to pay off the debt owed. This results in significant financial hardship for many people.
If you need help determining your options for removing a tax lien, contact TaxSmith, LLC, today.
Please fill out the Contact Request Form and a Tax Attorney/Paralegal will call you
to discuss legal representation or to schedule your free initial consultation