What Is A Tax Lien?

A federal tax lien is the government’s legal claim against your property when you have an overdue tax debt due to neglect or non-payment. The lien covers all of the government’s interests in all of your financial affairs. These include your property, your investments, and bank accounts, as well as any real estate holdings.

The IRS adds up all of your debt to them and then bills you for the total amount owed in a Notice & Demand for Payment. This is your last chance to settle with the government before they actually file and issue the lien against you. If you still haven’t made payment by the due date, the IRS then files a notice of federal tax lien. This is a public document filed by the IRS that lets creditors know the IRS is first in line to recoup their losses by seizing your property.

Many people aren’t aware that a federal tax lien even covers any property or assets you acquire after the IRS filed the lien. Foreclosure is still not an escape from a federal tax lien. Even if your property is foreclosed upon, if the IRS lien has not been satisfied by the property sale, the lien continues to attach itself to any and all properties and assets you continue to acquire.

Will A Tax Lien Affect Your Credit?

The short answer is that it is entirely possible. The lien may show up to credit reporting agencies. But by the time a person reaches this stage of the tax debt process, there are more pressing concerns than a ding to their credit history. One of the more terrifying prospects of having a federal tax lien filed against you is what could happen if you have a large tax debt.

If the IRS determines your tax debt to be sizeable enough, they are fully within their legal rights to foreclose on your family home! This is reason enough not to delay your action to resolve the tax lien. But what if you need to move to another apartment during the tax lien process? Since most leasing organizations use credit reports before agreeing to a new tenant, having a tax lien on your credit could jeopardize your ability to rent a new place.

Is A Tax Lien The Same Thing As A Tax Levy?

A tax lien and a tax levy are two different processes. A tax levy is when your property is outright seized to settle a tax debt.  A tax lien is defined as a legal notice to you and your creditors that all of your property is in limbo by the IRS, pending your debt repayment. So you can tell just from the definitions given above how much more drastic a levy is compared with a lien. You are in immediate danger of losing your property if you have been served with a levy. And under levy action, the IRS has the right to seize bank accounts, vehicles, and even social security payments! If you have received notice of an IRS tax levy, you need to call the IRS Tax Relief immediately to begin a dialogue on your behalf with the IRS.

How To Resolve A Federal Tax Lien

Obviously, the best solution is prevention! Don’t let inaction overcome you. Failure to communicate with the IRS only enables the snowball of penalties and government actions to grow. This is no time to put your head in the sand and hope it all just goes away.

Call us right away if you have unpaid taxes. We can help you avoid a lien in the first place. The best way to resolve a federal tax lien is to pay off your tax debt completely. Your lien is released 30 days by the IRS after you’ve paid your debt. If this is not a possibility for you, other alternatives can reduce a lien’s impact if the government and taxpayer have the same best interests. Let’s explore each of them.

Discharge of Property

The first way to reduce a federal tax lien’s impact is with a Discharge of Property. What this does is remove the lien from the specific property you own. This is an especially helpful consideration if the business you own will generate revenue to pay back the IRS lien. There are several provisions available to see if you are able to put this option on the table. We’ll explain the benefits and processes of each one so you are fully informed.


Subordination may be a good course of action if you need to pursue a loan or a mortgage at the same time you are resolving your federal tax lien. Subordination doesn’t remove the lien. Instead, it re-prioritizes the creditor list to move other creditors ahead of the IRS. This way, the mortgage lender would know there is no danger of the asset being seized by the government because of the lien in place.


This option still holds you accountable for the total amount due on the lien, but it removes the public notice of the federal tax lien we explained at the beginning of the article. This way other creditors are not competing with the IRS for your property.

How Does A Federal Tax Lien Effect Your Life?

A federal lien applies to all of your current and future assets (property, investments, vehicles, etc.) while the lien is active. Your ability to get credit or maintain a good score is severely limited. Even all of your business properties are targets. Did you know that accounts receivables are considered business property? A real possibility exists that you could be working each day just to send all of the profits back to
the IRS.

And you can’t escape a federal tax lien by declaring bankruptcy. This will only result in compounding your problems. You will still be on the hook with the government for the amount owed.

Partner With Trusted Experts

If you find yourself with a federal tax lien hanging over your head, you are not alone. Millions of Americans today are unable to pay their debt to the IRS. Waiting and ignoring are not actions that will get the IRS to go away. And not having an expensive tax attorney is no reason to throw in the towel. Contact the IRS Tax Relief Network as soon as possible to review your options and ignite a plan to restore your good standing, as well as your peace of mind. Our licensed professionals have over 30 years of experience in resolving tax issues such as liens.

We’ll begin with a 100% free consultation. Afterward, we’ll review your case step-by-step together. Our experts will lay out the best options for your situation. Then, once we agree, you’ll have a debt solution plan in place to get you back into good standing.

And know that during the entire process, your information will never be shared with anyone, and that’s a promise. IRS Tax Relief Network provides a 100% safe and secure service that you can rely on!

tax relief help needed