A federal tax lien is a process exercised by the Internal Revenue Service (IRS) as a means of ensuring that your liability is met. By placing a lien on your property, the federal government is acknowledging their interest in your assets, and if the debt isn't handled, they can seize any items and use them to cover the cost of the payment. Selph and Friday, CPA, an IRS representation firm in Texarkana, TX, understands the fear and stress many individuals feel if they receive this notification. The best way to reduce your anxiety is by understanding its effects and how to get it removed.

How Does a Tax Lien Affect You?

A federal tax lien can put your property at risk of being seized. This situation commonly applies to assets like real estate and automobiles. If you don't take the proper steps to remove it, a levy will grab those assets to cover the bill. 

Another common issue is obtaining credit. It can be challenging to find a lender willing to approve someone facing this problem because the lien also applies to any property you get while it's in effect. The IRS makes it public, so all financial institutions will be aware of the issue. The best way to avoid a levy is to handle the tax problem and get the lien removed.

What Should You Do to Get Rid of a Lien?

The most efficient way to get rid of it is to pay the tax liability. You can do this in one lump sum, but in many cases, an agreement for installment payments can be reached. However, the lien won't be removed until a month after the full amount is paid.

Aside from payment, there are a few other options to consider: discharge, subordination, and withdrawal. You can apply for a discharge to protect certain items from a levy; subordination allows you to work with creditors on various actions, like refinancing; and withdrawal hides the lien from public view. All three of these options are accompanied by specific eligibility requirements, so speak with your IRS representation firm to identify your options.

The professionals at Selph and Friday, CPA, understand that facing tax issues is overwhelming and stressful. To aid you through the process, they offer IRS representation, which involves handling communications with the government entity and advising you every step of the way. Arrange your consultation with an accountant by calling (903) 792-0281, and learn more about the team's tax preparation and relief services online.