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Tax liens are serious: here’s how they affect you

A city councilman in California and his wife have been hit with a tax lien totaling more than $35,000 after they failed to pay some or all of their taxes in 2009 and 2010. While there is a bit of irony in the fact that this councilman is in charge of collecting taxes from citizens, he and his family are still faced with a very difficult tax situation.

First of all, let’s talk about a tax lien and what it means. Many San Diego residents have probably heard the term, but may not know what it does. A tax lien is a way for the federal government to make a legal claim to the taxes that you owe them. The lien then “attaches” to any property or assets related to you or the debt, and creditors are notified that you have a lien.

This is where the major consequence of a lien comes in. Since creditors will know about your lien, you will essentially be blocked from securing any lines of credit in the future. Your property could be affected as well, as could your business. Any financial dealings you may be working on or just completing will become even more complicated with the realization of a lien.

It is imperative to get rid of a tax lien as soon as possible. You should consult a tax attorney and go about putting together a plan to either appeal the lien and have it removed, or to pay back your debt in a timely fashion and thus get rid of the lien.

Source: Los Angeles Wave, “Carson councilman faces lien for unpaid taxes,” Betty Pleasant, April 17, 2014