If you are unfamiliar with the world of tax law — and that’s understandable — then you may not necessarily know what a tax lien is or the impact it can have on your financial situation. A tax lien is essentially a claim made by the Internal Revenue Service, saying that you owe them money. The lien “forces” you to pay them by marking your financial record and making it nearly impossible to obtain new lines of credit. The IRS could even garnish your wages in this scenario.
The lien will hang over every financial move that you make so long as it is active. So, obviously you need to do one of two things: settle your tax lien in an appropriate fashion, or appeal so that the lien is removed.
If you take the first course of action (settling the lien), you could end up with a couple of different outcomes. You may end up with an offer in compromise, which could reduce the amount you owe in taxes. You could also reach an agreement that amounts to a payment plan, allowing you to pay off your debt over time.
The other course of action is to appeal or challenge the lien. There are many steps to the appeal, and depending on the circumstances of your case, the steps may be a little different. But, in essence, the appeal could get the lien removed from your record.
No matter what route you go, make sure that you consult with an experienced tax attorney.