I am sure that potential home buyers, existing home owners and real estate professionals have been faced with the problem of trying to buy or sell a home that has an IRS tax lien attached to it.

My firm, By The Book Taxes, located in Norwalk, CT specializes in income tax preparation for individuals, families and self-employed people. By the Book Taxes also helps clients resolve their tax debts by preparing and filing Installment Payment Agreements, Offers-in-Compromise, Currently Not Collectible and Innocent or Injured Spouse applications.

Over the next few weeks I will explain the methods used to navigate around a tax lien so that you will be able to buy or sell that home, but first you need to know a little about the IRS collection process.

The IRS collection process works as follows:

  • You file a tax return and if there is a balance due the tax is “assessed”
  • You receive a billing notice asking you to pay the balance within ten (10) days
  • If payment is not received, a “silent” lien arises which means you aren’t notified
  • You receive an escalating series of more threatening collection letters resulting in a
  • Threat to levy (take) your assets
  • If you owe > $10,000 the IRS will issue a “Notice of Federal Tax Lien” (NTFL) which attaches to your assets and destroys your credit rating
  • If you continue to ignore the IRS, levies will commence

Hopefully, you are never in this predicament. If you are, contact a tax professional who does tax resolution work immediately.

There are three (3) ways in which to navigate around a federal tax lien. They are:

  1. Subordination
  2. Discharge
  3. Withdrawal

Over the next few weeks I will go into each of these options in detail.

If you have years of unfiled tax returns or owe the back taxes, please call me. I can help.