Received A Notice of Federal Tax Lien

Federal Tax Liens Attached to Your House and All Your Property

The Internal Revenue System (IRS) issues tax liens against your property when your income taxes are delinquent. The IRS does not have to file a complaint in court and obtain a judgment before the lien attaches. They just file the lien and it is done. That is efficient and actually pretty cruel.

I Don’t Own Real Estate in the State the Lien was Filed

Many people believe the lien is against their real estate because it is normally filed in the land records office. So they mistakenly believe that it only attaches to their real estate in that county. Wrong. It attaches to ALL of your real estate WHEREVER located within the United States. And it attaches to the real estate you acquire after the lien is filed.

I Don’t Own Any Real Estate for the Lien to Attach To

So you don’t own any real estate. No need to worry, right?  Wrong.  Even if you don’t own any real estate the federal tax lien attaches to all your property. That’s right, all of you property, including property you obtain a year from now. Included are your earnings, cars, savings accounts, and even household items. The federal tax lien pretty much places a net over everything you own and are going to own.

What About My Due Process Rights?

Although there is no requirement for a court proceeding, your due process rights have not been violated. The IRS does follow specific procedures to collect the tax debt before resorting to the Federal Tax Lien. You will likely receive many notices from the IRS notifying you of their intent to collect a tax debt. You will even receive a notice of their intention to levy (put a lien on your property) that gives you one last opportunity to work with them prior to issuing the lien. In most cases your due process rights have been protected.

How Do I Deal With Collections of Federal Taxes?

Like most matters, you can always try on your own. The process is complicated and requires that you properly prepare and file many complicated documents. Errors on these documents could be costly.

You could consider filing bankruptcy. Contrary to popular belief, certain taxes in certain circumstances can be discharged. If you have other pressing debt, bankruptcy might be a very good option.

You can retain a competent professional who understands the complex nature of the forms and the proper classification of income, assets, liabilities, and necessary expenses. A tax profession can negotiate with the Internal Revenue Service and seek a number of remedies, such as affordable installment agreements, offers in compromise, and obtaining non-collectible status.

If you have back taxes owing to the IRS, call a competent professional to find out what options are available to remove or prevent a Federal Tax Lien.

Tired of Harassing Collection Calls

Harassing collection calls place a tremendous amount of stress on you and your family.  How the collections are handled vary greatly depending on who is collecting.  On one end you have the original creditor trying to collect and on the opposite end you have the third party collectors or debt buyers.  And likewise the collection methods change depending on who is collecting.

Most original creditors have some decency and professionally conduct their collection activities.  They will send you letters notifying you that your payments are late.  They may call you later to see if any kind of arrangements can be made.  If the account has been delinquent for some time, they usually send you a final notice that your account is being turned over to collections and that they may take legal action.

Collection companies who work for the original creditors are also generally professional.  They will typically send a letter notifying you that your account has been turned over to them for collections.  The letter will generally inform you that the account is overdue and inform you of the amount due and the methods to pay the account.  If this is unsuccessful they will generally send out additional letters and possibly contact you by phone to try and arrange payment.  They may even offer to settle the account for less than full value.  And if no payments are made, they or the original creditor may initiate legal action.

Many times the debt obligation is sold to third party collectors either before or after legal action.  When this happens, prepare yourself for harassing collection calls.  At this point, the professional conduct of the collection company can vary significantly.  Some third party debt buyers and their collection companies are very professional and follow the same type of conduct describe above, yes they may sue you but they generally don’t cause your phone to ring nonstop.  On the other hand, there are collection companies that are relentless and ruthless.  Harassing collection calls are used to try to scare and coerce you into paying them something.  They will call repeatedly.  The will tag team you with an investigator and a collection agent.  They will call your work.  They will call your relatives.  They will threaten to serve you with a summons and that the sheriff is on his way if you don’t agree to pay them now.  And believe it or not, some have threatened that they will sue you for fraud and that you are going to go to jail.

How do you stop harassing collection calls?  You have a couple options.  First of all you can pay the account.  Secondly, if it is a third party collector whose conduct is abusive, you can hire an attorney and bring a lawsuit against them for violation of the Fair Debt Collection Practices Act, but this will likely cost you more money and take many months to resolve.  And thirdly, you can file bankruptcy, which gives you Federal Court protection under the Bankruptcy Code.

If you are receiving abusive, relentless harassing collection calls, please call me to find out if bankruptcy is an option for you.