You can’t escape death or taxes but when it comes to taxes, make sure you know where you stand! Your house is one of your biggest assets, and it’s frightening to find out there’s a lien on your property. Do you have a tax lien on a house you own?
The government can seize assets to settle your tax debts, but they follow a process first. Don’t get caught unaware! If you owe the government money, it’s time to understand your options.
Keep reading for the meaning of a tax lien on a house and what to do about it.
What’s a Tax Lien on a House?
If you’ve got a mortgage, you already have a regular lien on your house. That lien means the bank or person financing your loan can take your property if you default on the loan payments. They can then sell the property to recoup their financial loss.
Federal and state governments can put a lien on your property if you’re in arrears on your taxes. Other common assets covered under a lien include, but aren’t limited to, cars and other vehicles, jewelry, stocks, bonds, and other securities and investment income.
A lien doesn’t mean the government will seize your property immediately. Has the government put a tax lien on your house?
Explore Your Options
The IRS must send you letter 3172 informing you there’s a tax lien on your home. If you’re worried you missed a letter, call the IRS and ask if there’s a lien on your home. Before you let the government seize your assets, look at your options.
Disagree with the IRS? Check the lien notice and see when your 30-day appeal period expires. Be sure and request an appeal before that date.
The Collection Due Process (CDP) takes longer but offers more flexibility if you don’t like the outcome. You can take your legal claim to the US Tax Court with this type of appeal.
The IRS will remove the lien if the hearing is in your favor. If taxes are still owed, it’s time to figure out a payment plan.
Consult a Professional
Regarding the government and taxes, it’s a good idea to consult a professional. The tax code is long and complicated, and you don’t want to pay taxes you don’t owe.
There are other issues at play here too. A tax lien doesn’t appear on your credit report, but it can affect your ability to get a loan. That’s because tax liens are public, so a lender searching the records will see the lien.
Removing a Tax Lien on a House
If you’ve got a tax lien on a house, paying the taxes owed is the fastest way to remove it. The government sometimes makes mistakes, so if you disagree with the lien, file an immediate appeal.
When it comes to the government and taxes, consulting an expert is a good idea. We offer a free consultation at Clean Slate Tax to get you started. Contact us today!