Tax liens make life harder
An IRS tax lien can be filed only after a liability is assessed, a notice and demand for payment is served on you, and you fail to pay the debt within 10 days of that notification.
Even if you have an IRS tax lien on your property, this doesn’t mean the IRS can force you to sell your home or that the government has taken over your property. However, if you want to sell the home, the IRS has a right to take the proceeds from the sale to satisfy your tax bill. If you want to refinance, the federal government may be willing to subordinate the lien, particularly if you use home equity to pay your taxes. Unfortunately, an IRS tax lien may make it difficult for you to qualify for a refinance.
Tax liens have a negative effect on your credit
An IRS tax lien, even if it is paid in full, will stay on your credit history for seven years after it’s paid. The further in the past the lien was paid, the less impact it will have on credit scores and lending decisions.
Under the IRS Fresh Start program, you can request that the IRS withdraw your lien after it is paid in full. You need to complete a form, and then once the lien has been withdrawn, you need to send that information to all three credit bureaus. Once you do that, you can have your credit restored, but it’s not a guarantee.
Eliminating an IRS tax lien
The best plan, if you know you may be getting an IRS tax lien on your home, is to sell it before the lien is triggered. And that’s where I come in. My name is Kevin Rosenbloom and I help people sell their homes for cash, satisfy any debts, and help them move into another home as soon as possible. I’m a tax lien specialist for homeowners in Brooklyn, New York. I will also give you other options, like paying your bills in full, starting an installment payment plan, or requesting a lien subordination and refinancing your home. All of these options can be a bit tricky, but I can help you navigate the tricky road towards freedom.