Receiving that dreaded letter from the IRS regarding a personal property lien can be very nerve-wracking and confusing. Many people will wonder ‘What does a lien mean for me?’ Well, a tax lien can be put on your home or other assets and can make things very complicated for you. A lien is not issued to immediately take over your property. However, if the tax is not paid or if the lien is not otherwise dealt with, it can impede your ability to deal with your personal property.
There are a few things you should understand about a tax lien right off the bat:
A tax lien can be put against your motor vehicle, home or rental property, bank account or your earnings.
Once there is a tax lien against your asset it makes it impossible for you to refinance your car or home.
You cannot sell or transfer a piece of property as long as there is a tax lien on it.
A tax lien will prevent you from borrowing any equity from your home.
Anyone can receive a letter from the IRS stating that a personal property lien has been issued against their assets. According to CNN.com the IRS just issued a tax lien against singer Lionel Richie for unpaid taxes. If it can happen to Lionel, it can happen to you! However, there are a number of things you can do to avoid the situation, or get rid of a personal property lien.
Avoiding a Lien:
Paying all your taxes in full and on time is the number one way to avoid a personal property lien. However, if your financial situation is such that you can’t file or pay on time, don’t ignore correspondence or letters from the IRS. If you can’t pay the full amount you owe, payment options are available to help you settle your tax debt over time:
Installment Agreement: Allows you to pay your taxes over time, if you qualify.
Offer in Compromise: Allows you to settle for less than you actually owe, if you meet certain requirements.
You will receive a letter from the IRS releasing your lien within 30 days after you have paid your tax debt.
Get Rid of a Lien:
If conditions are in the best interest of both the government and the taxpayer, these other options may be possible for reducing the impact of a personal property lien.
Discharge of property: This allows property to be sold free of the lien. A discharge of a tax lien removes the lien from a specific property, but the lien remains in place on any other property.
Subordination: This allows other creditors to move ahead of the IRS, which may make it easier to get a loan or mortgage. However, it does not remove the lien.
Withdrawal: This removes the public notice and assures that the IRS is not competing with other creditors for your property. Liens will now be withdrawn once full payment of taxes is made if the taxpayer requests it. Additionally, the IRS has indicated that the following withdrawal scenarios are not available:
Lien withdrawals for taxpayers entering into a Direct Debit Installment Agreement.
The IRS will withdraw a lien if a taxpayer on a regular Installment Agreement converts to a Direct Debit Installment Agreement.
The IRS will also withdraw liens on existing Direct Debit Installment Agreements upon taxpayer request.
If you have received a letter from the IRS regarding a personal property lien, Chang & Carlin can help you deal with the situation. Request a Free Consultation today to learn more about our real estate legal services. Real estate transactions can be extremely complex, and having a lawyer to help you through the process can make life a lot easier and protect you and your family.
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang & Carlin shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.
IRS refund season is upon us and you might be asking yourself "Where is my IRS refund?". If you have already completed your tax returns and are expecting to receive any refund amount, great or small, there are several key points to be aware of regardless of the complexity of your IRS return.
IRS Refund Options: There are now three options you can choose from when receiving your individual federal income tax refund - direct deposit, U.S. Savings Bonds, or a paper check.
Split Refunds: This allows you to divide your refund in any way you want, and direct deposit your refund into three separate accounts within the U.S. People choose to do this for a couple reasons; you can easily deposit into a checking account for more immediate needs, while concurrently bolstering your savings account. Additionally, it allows for a quicker refund than by using paper checks.
Processing Time: Your IRS refund will usually be issued within six to eight weeks from the date it is received, so long as your paper tax return is complete and has no errors. For electronic filings, the refund should be issued approximately three weeks after it was received.
The Effect of Payment Plans: If you are currently making payments under a payment plan for a prior year's federal taxes, your federal tax refund will be automatically applied against the amount that you owe. Additionally, if you owe anything on federal tax, state tax, a student loan, or child support, these debts can affect your refund totals.
Filing a Joint Return: The IRS can direct deposit a refund on a joint IRS return into your account, your spouse's account, or a joint account. Additionally, Illinois couples who have entered into civil unions will be able to jointly file their 2011 state tax returns, according to the Chicago Tribune.
Paying a Loan: The IRS will not allow a direct deposit to be applied to a loan account.
Delayed IRS Refund: There are a number of different reasons for delayed refunds, including:
Incorrect or missing social security numbers
Incorrect tax entered based on taxable income and filing status
Computation errors in figuring the taxable income, with-holdings, credits and deductions
Withholding and estimated tax payments entered on the wrong line, and general math errors
Larger or Smaller Refund than Expected: If you receive a check for more than you expected or an unexpected check, do not cash it until you receive a notice from the IRS explaining the discrepancy. If you receive a refund for a smaller amount than you expected, you may cash the check. Notify the IRS of any discrepancy. The IRS will send out a check for the difference if it determines that you should have been refunded more.
Refund penalties: If you fail to file an IRS return by April 15, but are due a tax refund from the IRS, there is no penalty for failing to file your tax return. The failure to file penalty applies only to those individuals who owe tax and do not file a tax return.
Lost Refund Checks: If your check is lost or missing, the IRS will send a replacement. In the event that your refund check has been stolen and cashed, the Financial Management Service will assist into initiate a claim. They will review the signature on the cancelled check to determining whether another refund can be issued.
Understanding your options can help you avoid confusion about where your IRS refund is, direct your IRS refund to the proper location (hopefully your bank account!), and make tax season less stressful.
However, problems with the IRS or the Illinois Department of Revenue can run deeper than these issues and be very frustrating to deal with. If you are dealing with complex problems such as IRS audits, appeals, federal refund litigation, tax court petitions, tax liens, issues with your IRS return, withholding tax litigation, or civil tax litigation, if may be advisable to contact a lawyer who has significant experience dealing with the IRS.
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang & Carlin shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.
If you find that you always end up owing the government money at tax time, you may be putting yourself at risk for tax liens.Tax liens are put in place when you fail to pay back your tax debt in a timely manner. These liens will prevent you from selling or refinancing your property.
The best way to avoid a lien is to avoid owing money at tax time!
Many people do not understand how many deductions they actually qualify for. Your income helps determine what deductions you can take, but there are some that everyone can deduct. Consider claiming some of these deductions this year in hopes of lowering your tax debt:
Alimony - Make your alimony payments on time and in full and you can write them off at tax time.
Child-care costs -If you have to pay for child-care while you're at work, you can deduct the cost. There are requirements for how much you work, and it has to be child-care you pay for rather than free care provided by family or friends. As much as $600 per child can be deducted and daycare, pre-school and camp all meet the requirements.
Gambling losses -If your gambling losses are higher than your winnings in a calendar year, tax liens are only a portion of your financial concerns. But the good news is, gambling debt beyond winnings is tax deductible.
Understanding what you can claim on your taxes as a deduction can drastically change the bottom line of what you owe at the end of the year. If you owe tax debt and are concerned about the potential of tax liens, reach out to a tax lawyer in Chicago, IL today. They can help you get out of debt and avoid tax liens.
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang & Carlin shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.
If you have been found to owe the government money for back taxes it is a debt that you can expect to stick until it is paid. Tax debt cannot be discharged through bankruptcy and once you reach a certain level of debt the government will put tax liens on your assets.
Putting a lien on someone's property is a process that is used to ensure that debts are paid. If someone puts a lien on your home you will be unable to sell or refinance the property until the lien is paid of. This helps the creditor ensure that they get their money at some point.
If you have had tax liens put on your assets in an attempt to collect past due taxes you might consider holding tax lien sales. Selling off any valuables and putting the money towards your debt is a great way to move forward.
It is important to remember that similar to bankruptcy, foreclosure will not help you escape your tax liens. The sale of a foreclosure that has a tax lien will take all of the income from the sale and use it to pay your tax debts.
There are solutions for debtors suffering with tax liens to help pay down debts and remove liens:
Payment plans - Even the US government will accept a payment plan. You will have to submit financial details proving your income and other details but once you complete the process payment plans are fine.
Lump sum pay-offs - Like any collection agency you can negotiate a lump sum payoff for your debts. This process takes a long 6-9 months but once completed you are debt and tax audit free.
Tax liens are good for 10 years - If the IRS puts a tax lien on your home it's only good for 10 years. After this time the lien expires.
IRS audits are a complicated process that can lead to a lot of confusing and time consuming processes. Tax lawyers in Chicago specialize in handling these situations and making sure they do all they can to help you pay your debts and get you back on your feet.
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang & Carlin shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.
