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Notice of Federal Tax Lien

A Federal Tax Lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest in all of your property, including real estate, personal property, and financial assets. A federal tax lien exists after the IRS puts your balance due on the books (assesses your liability); sends you a bill that explains how much you owe (Notice and Demand for Payment); and you neglect or refuse to fully pay the debt on time. The IRS then files a public document, the Notice of Federal Tax Lien, to alert creditors that the government has a legal right to your property.

A Notice of Federal Tax Lien from the IRS is different than a Notice of Levy. A lien attaches to all of your assets (such as property, securities, and vehicles) and to future assets acquired during the duration of the lien. Once the IRS files a Notice of Federal Tax Lien your ability to obtain credit may be limited. The lien attaches to all business property and to all rights to business property, including accounts receivable. Liens can effect your ability to sell real estate and other assets. Harder to release than the Notice of Levy, some options are available that may assist you when a Notice of Federal Tax Lien has been filed.

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