There’s about a week remaining before tax day, and that means people are fretting left and right about all of their financial matters. What deductions can they apply to their tax filing? How will they pay for the back taxes that they owe the Internal Revenue Service? Should they file for an extension on their taxes given the complex nature of their filing (or their own personal procrastinating nature)?
Two phrases that you will hear quite a bit in the coming weeks are “tax lien” and “tax levy.” So what are these things and how do you deal with them? Let’s start with the first of these two phrase, the tax lien.
A lien is basically a notification that you owe the IRS taxes. However, it isn’t just a notification — the lien will also make it impossible for you to secure new forms of credit or to obtain loans from the bank. Financial institutions will know about your lien, and it could make things very difficult for you while the lien is active. A tax levy, on the other hand, is something that grants the IRS the ability to seize property to fulfill tax debt or back taxes.
These two things are very powerful in the world of tax law, and anyone dealing with a lien or levy needs to take swift action to correct their situation. At Allen Barron, we have experience dealing with levies and liens, and we have the knowledge to deal with a comprehensive list of potential issues that arise from levies and liens.