| GOOSE CREEK, S.C. – According to the | | | | the IRS interest in a taxpayer's property as a |
| National Taxpayer Advocate's semiannual report | | | | creditor and allows the IRS to collect their share |
| released in July, federal tax liens are up 475% | | | | from the sale of the property if it is sold. |
| since 1999. | | | | "Generally, there is little that can be done to avoid |
| Federal tax liens are a claim against your property | | | | the filing of an IRS lien," Sholl said. "Among the |
| and are filed when a taxpayer fails to pay the | | | | best measures to attempt prevention of a lien |
| back taxes owed within ten days of receiving an | | | | filing is payment of the debt below $25,000 or |
| IRS demand for payment notice. According to JK | | | | borrowing the money to pay the debt in full." |
| Harris & Company, the nation's largest tax | | | | If the taxpayer cannot pay his tax debt and the |
| representation firm, the IRS issues tax liens to | | | | lien is issued, the negative impact can be |
| stake their claim in getting paid. | | | | long-standing. The filing of a tax lien may appear |
| "The primary function of the Internal Revenue | | | | immediately on a consumer's credit report and |
| Service is to collect revenue for the Department | | | | hurt their credit rating. According to National |
| of the Treasury," said Troy Sholl, a Licensed | | | | Taxpayer Advocate Nina Olsen, a lien filing may |
| Taxpayer Representative at JK Harris & | | | | cause a 100-point drop to a credit score. Having a |
| Company. "The IRS files federal tax liens against | | | | tax lien on his or her credit history may prevent a |
| taxpayers to protect the interests of the | | | | taxpayer from buying a home or car, signing a |
| government." | | | | lease or getting a credit card. Many employers |
| When a taxpayer fails to pay their tax debt, the | | | | also check credit reports, so the filing of a tax lien |
| IRS issues a Notice and Demand for Payment, | | | | might ultimately affect a person's ability to get or |
| giving the taxpayer ten days to fully pay their | | | | keep a job. |
| back taxes. If the taxpayer neglects or is unable | | | | "The best defense is a good offense," said Sholl. |
| to pay the debt within ten days, a Notice of | | | | "Pay your tax debts off quickly and, in most |
| Federal Tax Lien is then filed. This is a public | | | | cases, consult a professional for tax resolution |
| notification that the IRS has a claim on certain | | | | advice. |
| property or assets of a taxpayer. The lien gives | | | | |