How can I avoid a federal tax lien?

As a taxpayer in the United States, you have an obligation to pay your taxes on time. When you fail to live up to this responsibility, problems can result. Failing to pay your taxes may result in the government imposing a federal tax lien on your assets. This tax lien can affect many areas of your life and will take valuable time and resources to get it removed. Avoiding a tax lien to begin with is the best way to prevent a lien from affecting you.

Follow Two Simple Rules

A federal tax lien is designed to protect the government’s interest in all of your assets. This includes real estate, such as your home in Oklahoma City, personal property, and financial assets. A lien will be placed on your assets when the Internal Revenue Service (IRS) assesses your liability, sends you a bill saying how much you owe, and you thereafter neglect or refuse to pay the debt fully when due. You will know that a tax lien may be impending when you receive the Notice and Demand for Payment from the IRS. The next step after the tax debt remains unpaid is for the IRS to file a Notice of Federal Tax Lien to alert your creditors of the IRS’s right to your property. Removing this lien may be an involved process.

The good news for taxpayers is that a federal tax lien can be avoided by following these two simple rules:

  1. Pay your taxes in full.
  2. Pay your taxes on time.


Even in situations where financial or other life difficulties prevent you from being able to abide by these rules, open communication with the IRS may minimize the chances of a tax lien being placed on your assets. For example, you may consider one of the payment options available to tax payers that allow you to settle your tax debt over a period of time rather than all at once.

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