Dealing with an IRS tax lien can complicate your life. At Michelle Turpin PC, we understand the stress of tax problems. We’re here to help with your legal representation before the IRS and state tax matters nationwide. For almost 40 years, our law firm has been a premier federal and state tax law firm in the Mountain West region. Our team knows how to resolve IRS tax liens. We are tax law experts who care about our clients and the individual outcomes of their cases. We will give you personal attention and find solutions for your specific situation.
Tax Liens and Bankruptcy
- When a person owes taxes, the IRS (or state) files a tax lien on all their assets after all of the statutory prerequisites are completed. Tax liens are legal claims by the IRS or the state on your personal and real property for unpaid tax debts as of the lien date and all property acquired after the tax lien is in place. If you don’t pay or make arrangements to settle your tax debt, the IRS (or state) can levy, seize, and sell any real or personal property you own or have an interest in.
- Bankruptcy may help discharge some tax debts, but not all.
- Chapter 7 bankruptcy can eliminate (discharge) qualifying tax debts older than 3 years unless you filed your tax returns late.
- Chapter 13 discharge will eliminate (discharge) tax debts paid in the plan and tax debts older than three years unless returns were filed late.
- Existing tax liens usually remain after bankruptcy.
- Consult with one of our highly experienced tax attorneys to explore your options to deal with tax liens filed on your property before the IRS (or state) initiates levy actions to collect on the unpaid tax debts.
Understanding IRS Tax Liens
An IRS tax lien is a serious legal claim against your personal and real property that the IRS (or state) files to try and ensure that you can’t sell your property unless they get paid. It affects everything that you own, such as your house, car, and all of your money. While tax liens are not currently on credit reports that affect your FICO credit score, tax liens can make it hard, or impossible, to sell things you own without paying the proceeds to the IRS. This is one example of why it is important to deal with tax problems quickly and get help from experts.
Here's what happens when you get a tax lien:
- The IRS examines your tax returns and determines how much you owe.
- They send you a letter stating the amount you need to pay and the due date.
- If you don't pay all of it in time, the IRS might file a Notice of Federal Tax Lien.
- The Notice of Federal Tax Lien informs everyone that the government has a right to all of your property until the tax lien is satisfied (e.g., paid in full).
Don't lose too much sleep if you have a tax lien. It's serious, but there are ways to fix it. Our team at Michelle Turpin PC has helped thousands of businesses and individuals with the most complicated tax problems, including tax liens. We recently helped an elderly couple avoid the seizure and sale of their marital home where the IRS was going to get a judge to allow the IRS to seize their house and sell it to pay the husband's tax debt owed to the IRS. We can look at your situation, explain what you can do, and make a plan to deal with the lien.
Resolving Your Tax Lien
Avoiding and/or fixing a tax lien takes some planning, and there are a few different ways to do it. At Michelle Turpin PC, we want to help you find the best way to address your significant tax problems. Here are some ways to deal with a tax lien:
- Pay all your tax debt: This is the easiest way, but we know it's not always possible for everyone. If you can pay it all, the IRS will remove the lien within 30 days.
- Set up a payment plan: This lets you pay your tax debt over time with monthly payments. If you owe a certain amount, you might be able to get the lien removed after making some payments.
- Ask for a discharge of the tax lien: If you want to sell property to which a tax lien has attached, the IRS may issue a Certificate of Discharge of Property from Federal Tax Lien if the IRS is paid some of the liability secured by the lien and you are divested of all interests in the property.
- Apply for subordination: When the IRS issues a Certificate of Subordination, this does not remove the lien. Instead, it pays off a portion of the lien where the lender who provided funds secured by the property priority rights over the IRS’ tax lien.
- Ask to withdraw the lien notice: In some cases, you can ask the IRS to withdraw the tax lien while you pay your tax debt through a payment plan. If the tax debt you owe qualifies, you must submit the request in writing to the IRS using the IRS’ specified tax form and check all of the right boxes and provide the correct explanation to support your request to have the lien withdrawn. It is essential that you not default on your payment plans with the IRS once they are setup or you may not be able to have a tax lien released.
6. Obtain an Offer in Compromise: While the IRS will file a tax lien when you submit an Offer in Compromise, if the IRS accepts the proposed terms of your Offer in Compromise you will be able to have the liens released after you pay the IRS the amount of the accepted Offer in Compromise.
The foregoing options have their pros and cons based on the unique fact pattern of your case. The best choice depends on how much tax you owe, your current financial situation, and your long-term financial goals. Our experienced tax lawyers at Michelle Turpin PC can help you understand these options and choose the best one for you.
The Offer in Compromise Option
One really helpful tool for fixing tax liens is the Offer in Compromise program. This IRS program lets some people pay less than what they owe in taxes. It's not for everyone, but for those who qualify, it can be a significant help and provide them with a fresh start.
The Offer in Compromise program considers several factors, such as:
- How much can you pay?
- How much money do you make?
- How much do you spend?
- How much equity do you have in your assets?
At Michelle Turpin PC, we excel at helping clients with the Offer in Compromise process. With decades of legal experience handling Offer in Compromises for our clients, we believe that we are your best advocates for getting an Offer in Compromise accepted. We look closely at your financial situation to see if you can benefit from the IRS’ Offer in Compromise program. If you can, we will help you with every step, ensuring your offer looks as good as possible to the IRS. This includes:
- Advising you on how much to offer based on IRS rules and your specific situation.
- Filling out and sending in a strong Offer in Compromise application.
- Handling all communication with the IRS employees for you during the process.
- Providing complete legal advice to help you follow the Offer in Compromise requirements so that your offer isn’t revoked by the IRS after they accept your offer.
Remember, while an Offer in Compromise can be great for some taxpayers, not everyone qualifies. Our experienced team will help you explore all of your options to find the best solution(s) for your unique situation.
Preventing Future Tax Liens
While resolving your current tax lien problems is important, it's equally important to try and prevent future problems. At Michelle Turpin PC, we want to give you the knowledge and tools to help you now and also in the long run. Here are some things you can do to avoid future tax liens:
- File and pay your tax returns on time. While this is challenging, it is the only way to ensure that you stay out of tax problems with the IRS and state and local taxing authorities.
- Pay your taxes when they are due. Save money throughout the year for taxes. If you work for yourself or own a business, pay your estimated tax obligations every three months.
- If you can’t pay everything, have us work with the IRS to get into a payment plan that you can afford and won’t put you further behind in your current tax obligations. We don’t recommend talking to the IRS without legal representation.
- Consider working with a tax expert for ongoing tax planning. Regular check-ins can help you stay ahead of potential problems and improve your tax strategy.
- Keep good records. Keep your records organized all year to make tax time easier and reduce the risk of mistakes that could lead to audits or owing more taxes.
- Stay informed about tax law changes. Tax laws can change frequently. Staying informed or working with a tax expert can help you with tax planning strategies.
- Deal with IRS notices quickly. If you get any mail from the IRS, respond timely and appropriately. Ignoring these notices can make problems worse and more expensive to resolve in the future.
Our team at Michelle Turpin PC doesn't just help you fix current tax problems. We also provide services to help you plan for taxes to avoid future issues. We can work with you to create a complete tax strategy and help prevent future liens or other serious tax complications.
The Role of Bankruptcy in Tax Lien Resolution
In some really tough cases, bankruptcy may be considered as a way to deal with overwhelming tax debts. This is a significant decision with serious consequences, and it's important to know it's an option in certain situations. Bankruptcy can provide relief from tax debts, but it's crucial to understand when this is possible.
Bankruptcy can potentially eliminate some tax debts if they meet specific rules:
- The taxes must be income taxes. Other types of taxes, like payroll taxes or fraud penalties, usually cannot be discharged.
- The debt must be at least three years old, counted from when the tax return was due.
- You must have filed a tax return for the debt at least two years before filing for bankruptcy. This means you can't discharge taxes for returns you didn't file.
- The tax debt must have been assessed by the IRS at least 240 days before your bankruptcy filing. This "assessment date" is usually when the IRS officially records your debt in their books.
- You must not have cheated on your taxes or tried to avoid them on purpose. If the IRS can prove you did either of these, those tax debts cannot be discharged.
It is important to know that not all tax debts can be discharged in bankruptcy, and the process is complicated. There are different types of bankruptcy, each with its own effects:
- Chapter 7 Bankruptcy: This can potentially eliminate qualifying tax debts along with other unsecured debts.
- Chapter 13 Bankruptcy: This involves a repayment plan over 3-5 years and can help you manage tax debts over time.
Also, while bankruptcy might eliminate the tax debt itself, it doesn't automatically remove a federal tax lien that has already been filed. The lien might still exist on your property even after bankruptcy.
If you're considering bankruptcy as a way to deal with tax debt, talk to experienced tax and bankruptcy attorneys at Michelle Turpin PC. We can help you understand the potential positive and negative impact of bankruptcy in your specific situation, look at other options, and guide you towards the best decision for your financial future.
Why Choose Michelle Turpin PC for Your Tax Lien Resolution?
Dealing with tax liens requires know-how, experience, and a deep understanding of both federal and state tax laws. At Michelle Turpin PC, we have over 100 years of combined experience, offering expertise that can help you solve your tax problems effectively. Our team of skilled tax attorneys has helped many individuals and businesses in Utah solve their tax problems and regain their financial freedom.
We're proud of several key things that make us special:
- We are a law firm where our clients have attorney-client privilege. This provides reassurance for all of our clients knowing that they are protected by attorney-client privilege.
- Personal attention to each client's unique situation: We know that no two tax cases are the same. We examine your circumstances to develop a strategy for you.
- Deep knowledge of IRS procedures and state tax laws: We understand federal and state tax rules exceptionally well, which helps us navigate complex tax issues efficiently and effectively.
- A history of successful resolutions: Over the years, we've helped thousands of clients overcome tax liens and other tax-related challenges, establishing a strong reputation from the outcomes we provide our clients.
- Clear communication throughout the process: We keep our clients informed at every step. We explain complex tax concepts in understandable ways and provide regular updates on your case.
- A commitment to finding the best solution for you: Our goal is to solve your current tax issue and ensure your long-term success and financial stability.
- Ongoing support and education: We don't just solve your immediate problem; we provide you with the knowledge and tools to manage your tax obligations in the future.
- Legal, ethical and professional representation: We adhere to the highest standards of legal and professional ethics, ensuring your case is handled with integrity and complies with all legal requirements.
Don't let tax liens control your financial future. With Michelle Turpin PC, you're gaining a partner in your financial well-being. Contact the law firm of Michelle Turpin PC today for expert help in resolving your tax liens and getting back on track towards financial freedom.
Next Steps
Resolving IRS tax liens can be complicated and stressful, but you don't have to do it alone. With the right guidance and expertise, you can work through these challenges and move towards a better financial future. At Michelle Turpin PC, we are here to help you understand your options, make informed decisions, and take the necessary steps to resolve your tax liens.
To resolve tax liens, act quickly and get professional help. Ignoring a tax lien or trying to fix it without expert guidance can lead to worse problems and limit your options for resolution. Whether you need help with an Offer in Compromise, considering bankruptcy, or need advice on what to do, our team is here to help.
Choosing Michelle Turpin PC means gaining a partner in your journey towards financial stability. We will help you solve your current tax issues and equip you to keep your finances healthy in the future.
Don't let tax liens hold you back. Take the first step towards financial freedom today by contacting Michelle Turpin PC. Our experienced tax attorneys are ready to provide the expert guidance and attention you need to overcome your tax challenges. Contact us today to schedule a meeting and start your journey towards a future without tax liens.
