A Closer Look at a Federal Tax Lien Release
Taxes are essential in a democratic society where everyone gets to share something in the development and continuing progress of the nation. As such, it is very important to pay your taxes on time and in the correct amount. Failure to do so, and upon proper notification from the Internal Revenue Service, will result in a Federal Tax Lien. Meeting this responsibility, however late it may be, will lead to a tax lien release.
What is a Tax Lien?
The government has the responsibility to collect taxes from its citizens while issuing exemptions to others who may not really be financially capable of contributing to national development. However, when an individual fails to pay his taxes, he can be issued a Notice of Federal Tax Lien. A lien is the right to keep the possession of a property that belongs to someone else until such time that the debt owed has been discharged by that person.
When applied to federal taxes, it simply means that the government will impose this right to keep the possession of your property until you have paid all of your taxes – income tax, real property tax, or even personal property tax as well as other federally-mandated taxes.
What is a Tax Lien Release?
Once you have received your NFTL, you must make all efforts to pay what you owe the government in terms of taxes. Upon completion of this obligation, the government releases the lien – frees your property from being in the hands of the government – within 30 days. For example, if you pay today, you can expect to have full control of your properties within 30 days because of the tax lien release.
What to Do Next?
Upon completion of your tax payments, the IRS will automatically send you a copy of the Certificate of Release of Federal Tax Lien within 30 days. In the event that it has already been more than 30 days and you haven’t received any notification or certification yet, you can request for a copy of the CRFTL addressed to the IRS Advisory Group that services your community or local area. It is always best to send with your request proof that you have already paid the taxes that you owed the government. Make sure to include a copy of the Internal Revenue receipt or even a record of payment made via electronic fund transfers. In some cases, you may also want to send a copy of a canceled check or any other acceptable pieces of evidence or proof of payment of taxes owed.
If you are worried about your creditors, major credit bureaus always request for an automatic update of any changes in your credit standing including a tax lien release. In case they are not updated, you can furnish them a copy of your CRFTL so they can make the necessary changes.
The best way you can avoid a federal tax lien is by paying your taxes on time. Nevertheless, you can secure a tax lien release within 30 days of paying what you owe the government.
For deposition, trial work, court reporting, and other litigation support, we recommend contacting our friends at naegeliusa.com.
More Tax Relief Services
This article was written in collaboration with Allied Tax Group.
Back to Valley Tax Law home.