Federal Tax Liens Governement Options

The Federal Government of the United States has been given many options by the law to recover its tax dues from citizens. Federal tax lien is one of the most commonly used ways to recover tax dues. The law provides that the a federal tax lien can arise out of non payment of any tax but the most common cases where a federal lien generally arises are either income tax, gift tax or estate tax levied by federal government.

The provision for federal tax liens has been provided in the section 6321 of the Internal Revenue Code of United States. The section provides that the government of United States can impose a lien on the property of any person who is negligent or deliberately refuses to pay the the lawfully imposed taxes on him, or any associated interest or penalties levied by any lawfully appointed authority. The lien shall be applicable in the favor of US government and it shall be applicable on both real and personal property.

The period for which the lien shall be in force is defined in the section 6322 of the Internal Revenue Code of United States. The law says that unless there is a specifically declared period for which the lien has been imposed, it shall be applicable until the taxpayer in question clears all his dues or until such period, after which it becomes impossible to sustain. This means that theoretically a federal tax lien can apply in perpetuity.

The IRS can only impose federal tax lien after it has assessed the tax liability of the tax payer, sent a notification and demand to pay the taxes and if no payment is made within10 days of such notification. It is only after every single one of these three conditions have been fulfilled that the federal tax lien can arise.

Federal tax lien weighs heavily on the credit rating of a person who is served with the lien. It becomes painfully difficult to buy any property or a new credit card. Even signing a lease becomes a great bother. Federal tax lien attaches itself to all units of property that is owned by the tax payer or in which the tax payer has a right. This means that federal tax lien can land anyone in serious financial trouble if handled incorrectly.

Thankfully an appeal can be made against the federal tax lien in some cases. The conditions include the clearance of all the dues before the lien was imposed or if the lien was imposed in the period of bankruptcy. There are a number of other instances when federal tax lien appeals can be made the most common is where a procedural error had occurred in the assessment of tax liabilities.

If you fail to pay off your real property tax or other taxes, your property becomes subject to forclosures. You can look for real estate investor financing or tax lien help organizations if you want to get rid of federal tax lien imposed on you by Uncle Sam.

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