Avoiding IRS Notice of Liens

By Greenstein Rogoff Olsen & Co., LLP
Updated: 10/23/2012

Having an overdue tax bill may lead to severe problems. Understanding the IRS collections process may help to steer you out of harm’s way.

What is a lien?

When a tax payer owes money to the IRS, the IRS can file a tax lien against them. A lien is a legal claim that the IRS issues on the taxpayer’s property to satisfy the debt owed. The debt is not just the taxes owed, but interest and penalties assessed.

The lien will be for the amount of your tax debt. If the tax debt is not satisfied, the lien can be attached to assets such as your car, home or business.

How is a lien filed?

When a debt is owed, the IRS will usually send several notices to the taxpayer informing them of the debt. Before resorting to enforced collection, the Automated Collection System (ACS) will contact the taxpayer informing them that they have 24 hours to make the payment before collection is enforced.

The IRS does not need to issue a lien before collecting assets from the taxpayer. However, IRS agents usually acquire a court order before entering the taxpayer’s property.

How to avoid a tax lien?

A lien may reflect badly on your credit rating making it very difficult to take out any future loans. Proper preparation is the surest way to avoid problems with the IRS. The following tips will help in to avoid having a lien filed against you.

  1. Pay all tax bills in a timely manner. A good way to do this is to set aside the money that you will need to pay in tax right after you receive a paycheck. If you are self-employed, find the tax percentage for your income and set it aside in a separate bank account.
  2. Respect IRS agents. Keep in mind that, as a taxpayer, a “Bill of Rights” has been written in your behalf. However, when working with the IRS, rude comments will not work in your favor. Realize that the IRS agent that you are working with is also an individual and may be able to work things out with you. Disrespect will most likely not yield the results that you want.
  3. Work with a professional. A CPA can help you to understand what tax amounts need to be paid and when. This may have a higher short term cost, but will sometimes save you stress and money later on.

What to do if a lien is filed against you?

If a lien is filed against you, immediately seek professional help. A CPA or tax attorney may be able to assist you. A lien can be released 30 days after the debt is satisfied, but be prepared to pay additional fees to release and file the lien.

It is always better, less expensive and more convenient to avoid tax liens.

For more information on IRS collections, please visit

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