Taxpayers across the nation are breathing a sigh of relief now that the 2015 tax reporting deadlines have come and gone, unless an extension was filed. However, for those who filed but could not pay their 2015 taxes in full, there is no time for relief because a tax lien or levy may be on the horizon.
Unpaid taxes can lead to liens
When taxpayers fail to full pay their federal or state taxes, a tax lien is created. Liens attach to the taxpayer’s property and rights to property, from homes to vehicles to securities – even assets acquired in the future. If you own a property and the government files a notice of tax lien, the sale proceeds will be used to satisfy the lien unless the property is discharged from the lien or the lien is withdrawn. This is a serious handicap to a property owner. Tax liens may continue to stay in effect after bankruptcy. Liens also negatively impact credit scores and your ability to obtain financing. Finally, tax liens may adversely affect your ability to obtain business or employment.
Notices of Federal Tax Lien are filed by the Internal Revenue Service. A Maryland notice of tax lien is filed by the Comptroller of Maryland. In specific cases, a taxpayer may successfully request these agencies to withdraw their liens.
Removing a 2015 tax lien
There are a few ways to get rid of a tax lien:
- Pay the taxes due in full – the IRS will release the lien within 30 days
- Request discharge of the lien on specific property – the lien will remain in place on your other property
- Apply for withdrawal – the government retains its right to payment but agrees to remove the lien in order to help the taxpayer meet the liability
- Request subordination – the lien stays in place but the IRS moves below other creditors in line, possibly making it easier for the taxpayer to be approved for a loan or mortgage
Applications to modify a lien, such as by discharge or withdrawal, must follow the directions in applicable IRS publications.
Tax liens can lead to levies
In addition to filing liens, the Service and Comptroller of Maryland can levy assets to collect unpaid taxes. Levied assets can include, wages, social security, bank accounts, tax refunds and, in the most egregious cases, ones’ home. No one wants to live under the threat of enforced so it is important to address your outstanding taxes pro-actively with the assistance of a tax professional.
Consult a Baltimore tax lawyer
If you are facing the possibility of a 2015 tax lien or levy, call our skilled advocates who know the ins and outs of what is often a confusing process. The Maryland tax lawyers of Rosenberg Martin Greenberg regularly help clients handle tax liens and levies at the state and federal level. If you need assistance in handling a tax lien or another enforcement action, such as a wage garnishment, contact Rosenberg Martin Greenberg’s Brian Crepeau at email@example.com.