FAQ – IRS Liens
What is an IRS lien?
The IRS lien is a claim against your property. It is much like a mortgage or title loan on a car. Like the mortgage company or bank, the IRS lien gives the IRS priority to take your property.
Does an IRS lien mean the IRS can take my property?
No. An IRS lien is not self-executing. The IRS has to take some separate action to collect unpaid taxes. This may involve an IRS levy, which describes the act of taking property. The lien is just the filing. The levy is the action to collect.
What is an IRS lien notice?
Our tax laws provide the IRS with a lien against your property beginning on the date your taxes were due and unpaid. This lien does not have to be filed anywhere to be valid. Eventually, the IRS will likely file a notice of the IRS lien in the public records. This IRS lien notice is filed in the public records to help ensure that the IRS has a higher priority to your assets than your other creditors. The idea is that your creditors could search the public records and discover the IRS lien notice and, given this ability, the IRS is entitled to priority over those creditors.
Where does the IRS file its lien notice?
The IRS will usually file its lien notice with the county clerk in the county in which you reside (for states that have adopted the Uniform Federal Tax Lien Registration Act). It may also file it with the Secretary of State in the state in which you reside. It may also file it in other counties or states in which you own property.
Do I have a right to a hearing before the IRS files a lien notice?
Generally, no. You have a right to request a hearing once the lien notice is filed. The hearing is referred to as a Collection Due Process Hearing.
Will an IRS lien affect my credit score?
Yes. Once the lien notice is filed, chances are good that it will show up on your credit report and it will impact your credit score. The IRS lien notice will be removed from your credit file after a number of years. This usually happens when the IRS lien notice expires, which usually happens the later of the time the tax is paid or 10 years from the original due date.
Can I get the IRS to remove its lien notice?
Possibly. There are procedures to ask the IRS to remove its lien notice.