IRS Tax Lien - Federal and State Tax Lien Information

Have you become default in the payment of your taxes and would you like to know how the government is likely to levy it from you? Would you also like to know how much of that tax will be collected from you and how they are likely to be collected? This article will give you some insight on what a tax lien is and how it is levied and also what the usual mode of collecting them are.

A tax lien may be defined in simple terms as lien imposed by law on property to secure the payment of taxes. Tax liens are usually imposed on real property or personal property, to collect delinquent income taxes or other taxes. If you have a tax lien related to your property taxes and if you transfer the property with that obligation then the new owner of the property will be liable for the tax lien. That is to say the tax lien "runs with the land". There may be variations in the way the tax lien may be recovered depending on the law of the state but the basic principle is the same. When such payment is due notice is given to the owner and in case of mortgage to the owner as well as the mortgage holder. The usual practice observed is for the mortgage holder to make the payment and then demand it from the owner. The amount will be added to the repayment amount of mortgage.

The procedure of collection of tax liens on personal property also varies from state to state but the general theory is to get the amount collected from the personal property whether it is your house or your car or some valuable possessions. If the tax payments are not made within the specified time then the property bearing the lien may be seized and sold under foreclosure proceedings.

In case of default in payment of taxes the usual practice is to add a lien in favor of the state on the property of the defaulter. This amount will include any interest, additional amount, additional tax, penalty and also the cost that may accrue with it.

In all these situations whoever is going to be assessed for a  tax lien will be given notice with specified time to comply with them. The remedial action takes effect only if the demand is not complied with after repeated requests. Such notice is usually given after full assessment of liability. The lien attaches to all your property or all your rights to property. That is to say it attaches your house, land, car, bank account etc.

A lien on your property will also blemish your credit records so beware, as it may reflect on any financial loans or dealings you may require. Therefore it is advisable to pay it off at the earliest as and when you get notice of it and avoid lien filing. If you resolve the issue then the lien will be released within 30 days.

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