The Many Facets Of IRS LiensThe Internal Revenue Service is allowed to issue a lien on taxes. With IRS liens, the Internal Revenue Service is able to get an interest in your entire property. The concept of an IRS lien has been laid out in section 6321 of the Internal Revenue Code. This section provides that in case any person is found negligent in payment of his taxes even after demand has been made to him by IRS, the amount of taxes inclusive of other penalties shall be a lien on the property of the said person in favor of the United States. The period of an IRS lien has been discussed in section 6322 of the Internal Revenue Code. It stipulates that the IRS lien shall continue to exist until the relevant taxes and other dues are paid in full or there is such a lapse of time that the entire matter becomes unenforceable.
This time is defined by the Law of Limitations in Title 26 of the United States Internal Revenue Code. Section 6502 of the Internal Revenue Code provides that all taxes assessed before November 5, 1990 shall carry a lien which becomes unenforceable after a period of six years. All taxes assessed on and after November 6, 1990 will carry a lien period of 10 years. Under most circumstances, it is expected that the person pays all taxes and related dues within a maximum period of ten days, failing which an IRS lien will automatically arise. An IRS lien is retroactive. It is considered to be in effect from the date on which the tax assessment was made. For this reason some tax advisors consider an IRS lien as one of the most effective tools used by the IRS to collect taxes. Moreover, the court case between Glass City Bank vs. United States has established that the tax lien while effective on the property of the assessed on the date of assessment, automatically applies itself to any property that the person acquired after the lien became applicable on the date of assessment. Any property which is acquired in the period of lien gets the lien automatically attached to it. This makes it extremely difficult to buy or sell any property during the period of lien. If you are served with an IRS lien, you should start first of all by a thorough review of the lien. Consult a lawyer and an IRS tax professional in order to ensure the legality of the lien. Both of them will also help you understand how the lien is going to affect you. Next you must decide if you are going to appeal against the IRS lien, subordinate it or discharge it. In such cases, tax professionals can also provide assistance regarding the taxes, which form the root cause of IRS liens. |