If you owe money to the IRS and don’t pay it within a reasonably short period of time, you will eventually have to face the prospect of a federal tax lien.
Once a tax lien is filed there is little you can do to get it released apart from paying the underlying liability in full or waiting for the 10 year statute of limitations on collections on collections to expire.
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A federal tax lien is worse than a bankruptcy for your credit score.
Bankruptcy is a historic, one time act whereas a federal tax lien is evidence of an ongoing collection action that tells other potential creditors that the IRS is ahead of them in line.
We have seen credit scores plummet as much as 40% because of a federal tax lien.
You have a better chance of preventing the filing of a Notice of Federal Tax Lien than you do of getting a Certificate of Release once a lien has already been filed. This is why it is important for people with outstanding tax debts to seek professional help as early as possible in the tax collection process.
In appropriate cases, if the proper steps are taken, taxpayers may be able to prevent the issuance of a lien.
Your options are limited if a lien has already been issued against you.
However, there are still some things that can be done:
The IRS audited my 2007 and 2008 tax returns and disallowed 100% of my business expenses because the auditor said I didn’t have sufficient records. I hired The Pappas Group and they were able to prove by other means that my deductions were valid and the IRS ended up only disallowing about 15% of my expenses. Had I not hired Pappas I would been assessed taxes, penalties and interest in excess of $100,000. The Pappas group now does all of my accounting work and prepares both my business and personal tax returns.