A tax lien is a claim or charge by the IRS on the tax debtor's property for payment of the tax debt. By itself, a lien does not result in the seizure of the debtor's property. But it does establish the rights of the IRS to obtain possession to satisfy the tax debt. A lien also establishes the IRS as the tax debtor's primary creditor of record, pushing all other creditors to subordinate positions in the credit queue.
Tax liens can be dealt with in many different ways, depending on the needs of the tax debtor. Here are some of the actions we can apply for regarding tax liens:
Lien Withdrawal - Liens are a matter of public record, making credit almost impossible for a tax debtor to obtain. A Lien Withdrawal does not make the lien go away, but removes the lien from public record, including credit reports. The IRS will consider granting a Lien Withdrawal in order for the tax debtor to obtain the credit necessary to satisfy the tax debt.
A lien withdrawal may also be granted when public knowledge of the lien will prevent tax debtors from keeping their current job or prevent them from being hired at a new job. Similarly, a lien withdrawal may be granted when public knowledge of the lien will prevent a business owner from acquiring necessary business related credit.
Lien Subordination - Another option for obtaining credit. If granted, the IRS will give up its status as the primary creditor and assume a secondary credit position if a loan can be acquired that will secure the funds necessary to satisfy the tax debt from a creditor that is allowed to assume the primary credit position.
Lien Discharge - A tax lien attaches to all property and property rights either owned on or acquired after the date of assessment. A Lien Discharge dismisses a specific asset from being covered by the lien, thereby making it possible for the tax debtor to sell the asset and use the proceeds to satisfy the tax debt.
Lien Release - A tax lien is considered a self releasing action- in other words, when conditions are met to satisfy the debt, such as payment of the debt in full or expiration of statutes of limitation, the lien is supposed to automatically disappear. However, this is often not the case. Liens have been known to hang around for years after resolution, attached to a property- particularly real estate- without anyone's knowledge. If this is the case, or if a lien has been filed erroneously (it happens), a Lien Release must be applied for to make certain the lien ceases to exist.