If You've Got a Tax Lien, the IRS Can Withhold Your Security Clearance

If you have a tax problem, it will not get better with age.  In fact, the longer you wait, the more penalties that may apply.  If that’s not enough of a concern, it can also cost your job – or keep you from getting hired.  You could also be denied access to government facilities.

Security Clearance

More than 5 million Americans have jobs that require a security clearance.  You can be denied security clearance because of a tax lien or other tax issues. 

Military and Civilian Contractors are at risk, as are government jobs with access to security or sensitive information.  Air Traffic Controllers, jobs related to Homeland Security or Intelligence Agencies, Law Enforcement, and more may be affected.  Many jobs in the Aerospace industry, Research & Development, Tech sector, and other companies that do business with the government may also require clearances.

If one of these situations applies to you, and you have tax debt, liens, or concerns about your situation, talk to a qualified tax attorney before it becomes an issue.

Half Of All Denials Are Due To Debt Issues

You may think being denied a security clearance due to tax debt is a rare occurrence.  It's not. 

A Defense Office of Hearing and Appeals (DOHA) review determined that nearly 50% of security clearance denials involved debt issues.  While federal law doesn't specifically forbid someone with tax debt from getting clearance, the regulations offer a warning:

“An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.”

Reclass Or Review

It’s not just a concern when applying for work.  Even if you have clearance, there are periodic reviews depending on the level of clearance you have.  If a tax problem shows up in a reinvestigation period, you may lose your clearance and your job.

Tax Debt Can Lead To Tax Liens

When you don’t pay your taxes, the IRS may file a lien against your assets.  If your tax debt is greater than $10,000, the IRS can place a lien against you automatically.  It’s the government’s way of protecting their interest in the legal debt by attaching a lien against your property.

A tax lien can mess up your credit (not your credit score), prevent you from getting loans and mortgages, and prevent you from getting certain licenses, credentials, and security clearance. In some instances, the government can garnish your wages and seize/sell your property.

Under federal law, unpaid tax liens can stay on your credit report forever until you settle up.

You Can Overcome Your Tax Debt And Liens

There’s a provision in the statue that recognizes a “Good Faith Effort” to resolve your debts.  A tax attorney may be able to negotiate on your behalf to meet this good faith threshold and allow for security clearance by showing the problem is being resolved and unlikely to recur.

There’s also a “Fresh Start” initiative, which includes procedures to remove the lien before it’s fully paid under certain circumstances, including a qualified debt repayment plan.  It’s a complicated program and your best bet is to get help from a qualified local tax attorney. Call Travis W. Watkins Tax Resolution and Accounting Firm today for your Free consultation at 800-721-7054

Have you checked your credit score lately? If a tax lien had made its way onto your report, a new policy may have recently bumped your score up. Click Here for more information. 

Are you ready to think more clearly, take positive steps to solve your problems, and find creative ways to deal with the IRS? Download our FREE book, The Ultimate Survival Guide for IRS Problemshere!

Travis Watkins
Senior Tax Attorney
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