Can the IRS really put a lien on property?

Question

My sister & brother-in-law owes around $36,000 to the IRS from their own business in which they've been making small payments. The IRS is getting impatient & wanting the entire balance. They sent them a series of certified letters saying they will put a lien on their property unless they pay the entire amount in 30 days. Is this possible? & if it is, is there anything they can do to keep this from happening (aside from coming up with the whole $36,000)?

Answer 1

The IRS is allowed to do some pretty scary things. Yes they can put a lien on property and worse.
One can negotiate with the IRS and if they are unable to do anything on their own, they may have to contact a lawyer specializing in IRS cases. I would first have a CPA go over everything and make suggestions on how to deal with the IRS.

Answer 2

The simple answer is yes they can. It sounds like your sister has been making small payments in an attempt to keep them from doing just this. Generally with a matter like this, if you talk to the agency and ask in good faith, they will work out a payment plan with interest over a period of time. The end goal of the IRS is to collect the money and not deal with a house or property seizure except in extreme cases. However they do have that right. Open and honest conversation with the agent is the key. She should call and make an appointment to discuss other possible options. The key is that it sounds that she may have delayed this for a long period of time and they are impatient which is understandable.

Answer 3

Maybe it's possible, maybe it's not.

If the IRS agreed to the payment schedule, then the agreement is a contract that the IRS *must* honor.

A lien gives legal claim to your property and a Notice of Federal Tax Lien may be filed only after:

* IRS assesses the liability
* IRS sends you a Notice and Demand for Payment or a bill
* You neglect or refuse to fully pay the debt within 10 days after you are notified about it.

Once there is a lien, the property cannot be sold or refinanced without paying it off. If it's not paid off in ten years, the IRS levies against the property, and sells it 45 days later to satisfy the taxes due.

If there's no payment agreement with the IRS, your sister and her husband may want to file bankruptcy - either Chapter 7 or Chapter 13. In that case, the bankruptcy court may well require the IRS to accept those payments. Taxes are not normally dischargeable in bankruptcy court (there are exceptions), but the bankruptcy court DOES have jurisdiction.

Also, the IRS Ombudsman the authority to intervene in an enforcement action if the taxpayer is "suffering or about to suffer a significant hardship as the result of the manner in which the Internal Revenue laws are being administered."

I recommend that your sister and her husband immediately seek out an "enrolled agent" with experience in IRS liens (many do not have such experience) or an attorney who *specializes* in tax matters.

Answer 4

The IRS can and will put a lien on all of their property and garnish their wages as well as their personal and business bank accounts. They absolutely should not ignore this! The IRS has the ability to screw up your financial life in ways you wouldn't believe.

The IRS will allow you to enter an Installment Agreement that allows you to pay the debt over a period of time. The IRS may file a lien anyway to protect their interests but will usually not garnish your accounts so long as you are current on your installment payments.

If your sister and brother-in-law have any other options for raising money (selling cars, cashing out 401K, borrowing from relatives, etc.) they should definitely consider this. An IRS tax lien will stay on your credit record for years and is something to be absolutely avoided if possible.

They may also wish to consult a tax attorney or enrolled agent who specializes in delinquent tax matters.

Answer 5

There are no effects to this. that's what makes it so alluring. permit's see if I have been given this suited ?? Your underw ater on the dwelling house? The economic enterprise won't artwork with you? And the IRS is attaching to the dwelling house? that's merely too humorous. ordinary, permit the dwelling house pass back, while it particularly is bought the economic enterprise is 1st lien holder, they gets a commission off first, then the IRS is 2d their invoice would be addressed with the make the most of the dwelling house, and finally you get what's left. The IRS will nevertheless attempt series yet extra effective than in all probability won't hook up with private sources. and that i'm appropriate as I even have been via this two times!

Answer 6

Well, sure they can. Your sister and brother-in-law owe money - if they haven't paid it, then the IRS can put a lien on any of their assets for it - some assets can just be seized immediately.

If the money is for taxes withheld from employees rather than income taxes for the business itself, the IRS gets particularly touchy, since that was deducted from employee wages and not remitted to the IRS, just kept - basically theft although legally they don't call it that. But it's a much worse offense than not paying income tax when it's due.

To keep the IRS from putting a lien on their property, their only recourse is to come up with the money.

Answer 7

The IRS has the legal right to file a lien on their property after the required notice has been given and not appealed. If they are not already, it is going to be critical that they both get on a formal payment plan with the IRS right away. Aside from the lien, if they are not in compliance and do not have a formal installment agreement in place or other type of collection plan or hold the IRS may begin levy action. This would include garnishing their wages levying their bank accounts etc...
Because of the amount they owe (over $25k) it is going to be necessary for them to provide financial disclosure to the IRS.
I am an Enrolled Agent and deal with these issues for my clients everyday. I have a good deal of useful information on my website which you may want to direct them to. The site address is www.etaxrelief.com. Best of luck.

eTaxrelief.com

Answer 8

Yes they can and will. The I.R.S. is cold and awesomely powerfull government enity,that can make up the rules as it sees fit,to meet its needs. Its sole purpose is to collect money to feed an evermore powerful hungry government. Consulation with a very good tax attorney will likely be necessary to lessen the effect. Bottom line is if the I.R.S. determines if one owes them money,then they are going to get it,one way or another.

Answer 9

Finally, that's what I was looking for! Thanks to author of this question.