Facing an IRS tax lien can feel like a heavy weight on your shoulders, threatening your assets and your financial future. For individuals and businesses throughout North Dakota, a federal tax lien isn’t just a tax problem; it’s a major source of stress and uncertainty. The good news is that you have options, and with the right professional guidance, you can navigate this complex process and get your financial life back on track.
At 701 Tax Resolution, we understand the specific challenges facing our neighbors in Valley City and beyond. Since 2018, our team of certified tax consultants, led by Enrolled Agent Nikole Nelson, has been a trusted partner in providing top-notch tax negotiation and mediation services. We’re here to help you understand what a tax lien is and, more importantly, how we can work to get it removed.
What is a Tax Lien?
First, let’s be clear about what an IRS tax lien is and how it differs from a tax levy.
- Tax Lien:An IRS tax lien is the government’s legal claim against all of your property—both personal and business—when you fail to pay a tax debt. It’s a formal notice that the government has a legal right to your assets. While a lien does not seize your property, it can make it incredibly difficult to sell your home, secure a loan, or refinance your mortgage. It also becomes a public record, which can impact your ability to get credit.
- Tax Levy:A tax levy is the actual seizureof your property to satisfy a tax debt. The IRS may levy your wages, bank accounts, or even physical assets to collect what you owe. The IRS often files a lien before a levy to secure their claim on your property.
Essentially, a lien is the government putting its hand on your property to make a legal claim, while a levy is the government taking action to actually seize that property.
The Impact of a Tax Lien
An IRS tax lien can have a severe ripple effect on your life and business:
- Credit Score:While credit bureaus no longer include tax liens on credit reports, lenders can still find them through public records. The existence of a tax lien can signal financial distress, leading to loan denials, higher interest rates, or lower credit limits.
- Asset Liquidation:Trying to sell or transfer property, such as real estate or vehicles, with a tax lien attached can be a huge hurdle. The lien must be addressed before the sale can be completed.
- Business Operations:For business owners, a tax lien can make it difficult to get business loans, secure lines of credit, or maintain a positive reputation with vendors and suppliers.
Pathways to Tax Lien Removal
The good news is that an IRS tax lien is not a permanent fixture. There are several ways to get it removed, and the team at 701 Tax Resolution has the expertise to determine which option is best for your unique situation.
- Full Payment:The most straightforward way to get a tax lien released is to pay your tax debt in full. Once the debt, including all penalties and interest, is paid, the IRS is required to release the lien within 30 days.
- Offer in Compromise (OIC):If you can’t pay the full amount you owe, an Offer in Compromise may be a viable solution. An OIC allows you to settle your tax debt with the IRS for less than the full amount. If your OIC is accepted and the terms are met, the IRS will release the lien.
- Installment Agreement:If you can’t pay your tax debt all at once, you may be able to set up a monthly payment plan with the IRS. In some cases, if you enter into a qualifying direct debit installment agreement for a balance under $25,000, you may be eligible to have the lien withdrawn after making a few consecutive payments.
- Lien Withdrawal:This is different from a lien release. A lien withdrawal removes the public notice of the lien, making it as if it were never filed. This can be beneficial for your credit and reputation. The IRS may grant a withdrawal if you’ve paid off your debt or if they determine that it will facilitate the collection of your tax liability.
- Lien Subordination or Discharge:In some cases, you may not need to remove the entire lien. A lien subordinationallows other creditors to move ahead of the IRS, which can make it easier to get a mortgage or loan. A lien dischargeremoves the lien from a specific piece of property, so you can sell it without the entire lien being released.
Why Professional Help Matters
The IRS’s collection process can be complicated and intimidating. The forms, deadlines, and requirements for each resolution option can be overwhelming. This is where a trusted tax resolution expert is invaluable.
At 701 Tax Resolution, we take the burden off your shoulders. Nikole Nelson, EA, has over 16 years of experience dealing directly with the IRS. Our team meticulously handles all of the paperwork and communication, so you don’t have to. We assess your specific situation, determine the best course of action, and act as your advocate with the IRS, all while providing a professional and reassuring experience. We’re committed to minimizing your tax burden and getting you the peace of mind you deserve.
If you are an individual or business in North Dakota dealing with a tax lien, don’t face it alone.
Contact Nikole Nelson, EA and 701 Tax Resolution for a free evaluation of your tax lien. Proudly serving Valley City and all of North Dakota.
