Thursday, September 25, 2008

Tax Term of the Week

Tax Lien- A tax lien is NOT a levy!! A government tax lien gives the IRS a legal claim to your property as security or payment for your tax debt. Once a lien is filed, the IRS has claim against ALL your property, your accounts receivable if you own a business, and anything you acquire after the lien is filed. This means that if you go to liquefy any assets, the IRS has legal claim to that money. In this way, liens ensure that the IRS gets paid if your financial situation changes.

If you ignore the problem, the IRS may become more aggressive and place a levy on your account(s), even going as far as to seize your property. Additionally, tax liens can only be lifted when your tax debt is paid in full.

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