If you don't pay your back taxes, the IRS can and will file a Federal Tax Lien. A Federal Tax Lien marks the IRS' priority on your real and personal property against all other creditors and gives them the right to seize and sell such property subject to prior encumbrances. Prior to such seizure, the IRS must make an assessment and make demand for payment. And if you don't pay within the time specified in the first notice, they have the right to begin enforcement proceedings.

In fiscal year 2007, the IRS filed 683,659 Federal Tax Liens, four times more than in fiscal year 1999 when 167,867 were filed.

The IRS will release a Federal Tax Lien when it is fully satisfied. They will do this 30 days after full payment or immediately if paid in cash or the equivalent of cash. They will also release a lien upon the posting of a cash bond or upon giving the IRS a mortgage on real property whose fair market value is twice the value of the tax debt. Both the mortgage and the bond must stipulate payment terms over an agreed upon time frame.

A Federal Tax Lien can also be withdrawn if one of the following applies:

• It was filed too soon or not in accordance with IRS regulations;
• It speeds up the actual collection process; or
• It is determined that it is in the best interest of the taxpayer and the IRS.

A taxpayer can also appeal the filing of a Federal Tax Lien. The IRS must notify you that a Federal Tax Lien has been filed within five days after the lien is filed. Some of the issues an appeal can be based upon include but are not limited to the following:

• The tax debt owed was paid prior to the Federal Tax Lien being filed;
• The tax was assessed and the Federal Tax Lien filed while the taxpayer was in bankruptcy;
• A procedural error was made during the assessment;
• The statute of limitations on the debt had expired before the Federal Tax Lien was filed; or
• The taxpayer was not given an opportunity to dispute the liability. If you have a Federal tax liability, and you cannot fully pay all you owe at this time, JK Harris and Company may be able to help in keeping that Federal Tax Lien off the public records of your county courthouse.

Did you know...?

Did you know the IRS filed 768,168 Federal tax liens in Fiscal Year 2008?

What JK Harris clients
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Our world of financial success was turned upside down very quickly with a series of events we could not control. I saw an ad in the newspaper from JK Harris & Co. - "they could help." For one up front fee they would stay with us until we settled all our tax issues,...

Mr. and Mrs. S.M. of Camdenton, MO September, 2004