What Does Having a Tax Lien Mean and How to Remove One? | Axiom Tax Resolution Group

Tax liens are a common problem for taxpayers, but many people don’t understand what they are or how they work.  

When a taxpayer doesn’t pay their taxes, the IRS or another taxing authority may legally claim ownership of the taxpayer’s property as a tax lien.

The lien entitles the government to seize and sell the assets to pay off the debt.

Tax liens can significantly harm a person’s financial condition by limiting their access to credit and other financial services.

For instance, it might be challenging for someone to get approved for loans or mortgages if they have a tax lien on their credit report for up to seven years.

The lien will accrue interest and additional penalties, making the debt even more difficult to pay.

Tax liens in Birmingham, AL, threaten your assets. You must cooperate with the IRS to pay your previous taxes to get rid of them.

What Is a Tax Lien?

The government may place a tax lien on real estate or another asset when an owner is behind on their taxes. Municipalities can sell investors tax liens that give them the power to demand full and interest-bearing payments of unpaid taxes from property owners.

You run the risk of a tax levy if you don’t pay a federal tax lien. The actual seizure of property to pay back delinquent taxes is known as a tax levy. Tax levies can take the shape of deductions from your paycheck or the seizure of your assets, including your home and bank accounts.

What Does Having a Tax Lien Mean?

What might occur if you get a federal tax lien placed against you by the IRS because you owe back taxes?

  • Your credit score may drop. Even if tax liens are no longer reported to credit bureaus, the IRS can still publish a notice of the tax lien, alerting creditors about the government’s claim on your property. 
  • It could be challenging to sell or refinance a house. Title searches frequently turn up tax liens. You’ll probably need to utilize some of the equity in the home you’re seeking to sell or refinance to pay your taxes to complete a sale or refinance. You might ultimately pay a high price. 
  • The IRS sends a sizable proportion of past-due taxpayers through its automated collection system, or ACS, which can result in hours of contact center hold time. 
  • A tax levy can be the result. The IRS may issue a Notice of Intent to Levy if you don’t pay your back taxes after they have been subject to a federal tax lien.

How to Remove a Tax Lien

  • Resolve any unpaid taxes. Even though it might seem obvious, frequently, paying your past-due taxes is the only option to avoid a tax lien or tax levy. The most important thing is to assist with the collection effort. If they ask for anything, you give it to them. If they do, get in touch with a tax resolution in Birmingham, AL. 
  • Put up a payment plan with the IRS. You can persuade the IRS to remove the federal tax lien from the public record if you allow the IRS to withdraw money straight from your bank account for at least three consecutive payments (referred to as a direct debit installment agreement). Your tax debt will continue to accrue interest and penalties until it is fully paid. (Of course, you still have to pay your tax debt.) To enroll in an IRS payment plan, you don’t need to work with a professional; you can do it yourself on the IRS website. Depending on the plan and your income, the fees could range from $0 to $225.
  • Request a realistic counteroffer. A plan to pay less than the full amount of back taxes you owe is known as an OIC or offer in compromise. Numerous requirements exist; the IRS normally only approves less than half of the petitions it receives yearly. You must have submitted the applicable tax forms and made the necessary projected tax payments for the current year to be considered. You won’t be considered if you are the subject of an audit or insolvent.
  • Submit a refutation. If you want the IRS Office of Appeals to review a notification of a lien or levy, you can request a collection due process hearing. You can also request a meeting with the employee’s management and request that the Office of Appeals look into your case if you disagree with an IRS employee’s assessment of a lien or levy.
  • Bankruptcy. Although it is an ugly choice, it occasionally aids in tax debt repayment. However, it frequently requires a lot of time, has numerous restrictions, and isn’t always successful.


Tax Lien is an official claim against a property by a governmental agency when the owner has failed to pay their taxes. A Tax Lien can affect a person’s credit score and prevent them from accessing credit or selling their property until the lien is paid off. However, the great news is that there are ways to remove a Tax Lien, such as paying the amount owed, making an installment agreement, or filing an appeal. Therefore, understanding the basics of Tax Liens and knowing how to stop them is important for anyone facing this situation. Make sure to hire tax relief services in Birmingham, AL, to stop them. 

Axiom Tax Resolution Group is an expert in tax dispute resolution. Our team of reputable tax professionals can help you address your tax problems with the IRS in a lasting manner. Get help dealing with tax liens in Birmingham, AL by contacting us today!