Dealing with the IRS and related tax problems can be anyone’s worst nightmare. Once the IRS has begun to go after you, it can seem that they won’t stop even after you think they have gotten what they want. The tax lawyers of Jones & Ryan have been working since 1995 to solve such nightmares. Grey W. Jones, Esq. and Cheryl L. Ryan, Esq. are tax attorneys with extensive knowledge in tax law and today want to answer some of your common tax questions for free. Below you will find four answers to common tax and IRS related questions. If you wish to find more in-depth answers and get more tax help our website offers an extensive frequently asked tax questions section that we are constantly updating, as well as, a simple tax help questionnaire to start a free initial consultation with our tax lawyers.
Why did the IRS file a tax lien against me?
A tax lien, usually filed with your county recorder, serves as notice to those who may loan you money (home or car loan, bank loan, credit card advances, etc.) that once the lien is filed, the IRS’ claim against you for taxes will come before those of anyone loaning you money after the filing. With certain exceptions it attaches to all property, real and personal, tangible and intangible, in which you have an interest, wherever the property may be located. A lien does not result in the actual seizure of any property, real estate or other forms. Further, before the IRS can file a lien against your property, it should give you 30-day notification that it intends to do so. This may give you time to make a payment or other arrangements.
Can the IRS levy on my house? On my wages? On my bank accounts? What about retirement funds?
A levy usually means the property is actually seized by the IRS. In the case of real estate, it means the IRS can force a sale of the property and keep the proceeds up to the amount of taxes, penalties and interest owed. A certain portion of wages and commissions are exempt from levy; the amount depends on a number of factors, including the number of dependents. All forms of bank accounts—savings, checking and CDs—are subject to a levy in full. In order to catch subsequent deposits, the IRS must serve a new levy on the bank. Once wages are levied upon, the same levy reaches all subsequent wages, commissions, bonuses, etc. No forms of retirement funds are exempt from levy, including social security payments and other forms of government pensions. However, unemployment and workers’ compensation benefits are exempt from levy, as are SSI and some forms of public assistance. A small amount of household and personal effects, and tolls and equipment used in the taxpayer’s trade or business, are exempt from levy.
The IRS is garnishing my wages. How can I stop them?
The IRS will garnish your wages after proper notice. All the IRS wants is payment or a good reason why you can’t pay. This is when you can negotiate a payment plan or an Offer in Compromise or convince the agency you are worthy of uncollectible status. It is imperative after you receive a notice of “Intent to Levy” that you deal with it immediately. Intents to Levy are time-sensitive and if you miss your deadline to reply, i.e. make payment arrangements, your employer will be made aware of the situation and your wages may be garnished. If you’re not sure how to go about this, consult a qualified tax attorney to assist you.
When is the right time to consult an attorney?
There are various reasons you would need to consult an attorney such as: fraud investigation, a long audit or one that involves legal issues, inadequate books/records, not filing returns for a number of years, if you don’t actually owe taxes, if the statute of limitations has run out or if you would feel more comfortable dealing with the IRS through an attorney. Whatever the reason, don’t hesitate to contact an experienced tax attorney to help you through your foray into the wide world of IRS red tape. Many law firms including Jones & Ryan offer free initial consultations to better understand your situation and decide how they can help.
i bought tax liens (1994 thru 2003) on a house in 2004 and foreclosed finally in may 2007 (may paid 2004 thru 2007 back taxes) so the house is mine to gut and rehab. the tax collector said i needed to remove the tax liens . my attorney implied i could do it myself but i haven’t been able to reach him. what is the process to take the liens off? thank you.
How to Remove IRS Tax Liens The IRS possesses wide powers as far as tax collection is concerned. When a taxpayer defaults on the tax redemption, filing for a lien is the first activity they carry out to recover the dues in the form of IRS tax debt. As per the law, a lien attaches to all the properties and possession owned by the taxpayer, once a federal tax notice is “served”. This indicates that the IRS gets a legal right over the assets and bank accounts owned by the taxpayer to recover IRS debt. To make the lien more effective, it’s required to be filed in the “public records” system, which is usually the local county office where individuals file their tax returns. The IRS initiates this legal instrument if it feels the individual is neglecting the payment of outstanding tax dues.
IRS tax lien implications The filing of a lien can have an adverse implication for the taxpayer. Once the lien is served, it imposes an encumbrance on the assets owned by the tax debtor. Due to the imposition, the credit rating of the individual decreases considerably. Normally, credits limits are issued against the security offered by the assets owned by the debtor. The filing of the tax lien by the IRS has a strong effect of advertising to the world that a particular person is a tax defaulter, and a “wrong one”. No creditor likes to provide credit facilities to a person bogged down with “bad reputation”, since liens are associated with Hugh recoverable liabilities which proceed credit recovery by the lenders if the borrower exhibits delinquency. Getting fresh loans becomes almost impossible for such a person.
Tax lien solution So the basic question is if a tax lien is in fact imposed, what’s the solution? The recommended thing to do is to clear the tax debt as soon as possible, and eradicate the imposed lien. This can only be done by redeeming the IRS taxes. The IRS is obliged to “release” the lien and make it “ineffective” within thirty working days after the tax dues are paid in full and all outstanding penalty is redeemed.
Wage garnishment If the debtor cannot pay the entire due amount in one lump sum, the taxpayer holds the right to make a request for making the payments in installments. Once a monthly installment schedule is drafted, it becomes possible to request an immediate release of the lien by redeeming the IRS debt. However, the IRS may entertain this request if they “feel” it’s OK to remove the protection, and the tax debtor is certain to redeem the taxes. However, there’s one more option available in case the IRS decides not to release the lien. It’s possible to undergo wage garnishment and pay the outstanding tax through payroll deduction from wages, or electronic clearance from debtor’s bank account. When consent is given for such automatic deduction, the IRS starts recovering the taxes from the monthly pay.
Third party guarantee Another option is to provide a certain guarantee offered by a third party, in which case the guarantor “promises” to redeem the taxes in the event the tax debtor fails to make the payments. This option can also be in the form of a “bank guarantee”. The IRS generally releases the lien if they are convinced about the regularity in the monthly payments leading to a total pay off over time by the IRS tax help provided by the guarantor.
IRS tax relief Professional lending companies offer special credit facilities to redeem the outstanding IRS dues by offering IRS help. These facilities are generally offered through IRS tax relief or IRS tax settlement programs. As per the process, an expert in taxation working for the company represents the tax defaulter, and negotiates on his or her behalf to work out an arrangement and seek waiver to reduce some of the outstanding IRS dues. The remaining tax amount is paid off on behalf of the individual to the IRS, and subsequently the debtor pays reduced monthly installments to the credit company to redeem the dues owed to that particular company. In such cases the IRS receives its money so the lien gets released automatically.
I have a state tax lien filed against me (NC-USA) from several years ago. I was working with a criminal attorney, and he assured me he could resolve the civil lien as well as my other “issue”. Well, it appears he’s dropped the ball in the civil arena, and I don’t know what my options are at this point. Does a state tax lien ever “expire” after a number of years?
