Not paying federal taxes can cause the IRS to place a federal tax lien against you. The lien protects the government’s interest in all your property, including your home, vehicle, personal property and financial assets.
How a Tax Lien Affects You
- Assets: A lien attaches to all of your assets (such as property, securities, vehicles) and to future assets acquired during the duration of the lien. The government might foreclose your property in order to get paid.
- Credit: Once the IRS files a Notice of Federal Tax Lien, the lien is reported to your credit as a Public Record, which generally brings your scores down around 40-45 points per lien.
- Business: The lien attaches to all business property and to all rights to business property, including accounts receivable.
- Bankruptcy: If you file for bankruptcy, your tax debt, lien, and Notice of Federal Tax Lien may continue after the bankruptcy.
- Employment: When applying for a government clearance, or keeping your job (especially if you are in the military) the lien will be a decision maker, meaning denial.
- FHA Loans/Home Purchase: You cannot qualify for FHA loans if you have an outstanding debt with the government. Most conventional loans will not approve you either. You will either be denied or required to pay the lien in full.
How Long Does It Affect You?The statute of limitations on federal tax liens is 10 years.
Once the statute of limitations expire, the IRS has the option to either release OR renew the tax lien.
Tax liens will continue to appear on your credit report for 7 years after you completely pay off the lien or the statute of limitations expire.
How Can We Help?We work on having the federal tax lien completely and legally removed off your credit report, meaning:
- You will not have to wait a minimum of 10 years (up to 30 years).
- You will not have to pay off the lien.
- Once removed, you can get approved for FHA and Conventional loans (home purchase).
- Once removed, you can pass government clearance and keep your job, especially if you are in the military.