It’s one of the scarier terms in the Internal Revenue Service’s lexicon: tax lien. If you owe taxes and haven’t been able to pay them, you may have one – or live in fear of one.
So what does it mean to have a tax lien attached to your property? Here’s what you need to know:
What is a tax lien?
Simply put, it’s a document filed with the county government alerting the general public that you have an unpaid debt. If the property is sold, the government debt you owe will be paid and you’ll get the rest of the money.
The types of tax liens vary. You could have a federal tax lien on your house, but you could also have a state tax lien or a tax lien from your county or city. There‘s also the “super lien,” which involves being behind on homeowner association fees. And you aren’t alone if you have a tax lien: In fiscal year 2012, the IRS filed over 708,000 Notices of Federal Tax Liens.
If you have a federal tax lien, in most cases, you have much more time to work things out, and the likelihood of keeping your house goes up considerably. But it is a financial inconvenience, to say the least.
Avoiding Tax Liens
Contact the number on the paperwork you receive informing you that you owe money to the government. You may be able to work out something better than you expect. For instance, sometimes the IRS will allow subordination, which lets other creditors like financial lenders take their debts before the IRS. This can make it easier to get a loan or mortgage. Sometimes the IRS will also allow an Offer in Compromise, which allows the taxpayer to satisfy the debt with a smaller amount.
Selling Your Home To Pay Off Your Taxes
Selling your home for cash may be what you need. With a quick home sale that puts money directly in your pocket you’ll be able to pay off your taxes. We offer a no-hassle sale process that is quick and leaves the banks out of the situation. Give us a call today.