As we already mentioned, tax liens can be filed against both personal and business assets. If you’re business is run as a sole proprietorship, as far as the IRS is concerned, you and your business are basically the same—so you should probably expect a tax lien on your business assets will include a lien on your personal assets as well.

What do you need to know about tax liens?

A tax lien is a legal claim applied to a property when the owner fails to pay required taxes to the government. Tax liens total the amount of outstanding taxes, plus interest or additional fees accumulated by the property owner.

When does the federal government file a tax lien?

The federal government files a tax lien when you are delinquent on your personal or business taxes. If you’re delinquent on personal taxes, the lien is filed against your personal property; if it’s your business taxes, the lien is filed against your business property.

What makes a tax lien a non consensual lien?

Tax liens are considered non-consensual or statutory liens because they don’t involve a contract with a creditor like a UCC lien. Statutory liens are not limited to federal tax liens either.

What does it mean to have a federal tax lien?

A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest in all your property, including real estate, personal property and financial assets. A federal tax lien exists after: The IRS:

What does it mean to have a silent tax lien?

The “silent” tax lien means the government has a right to your property and if you sell your property subject to the silent tax lien, you are supposed to pay the government. As a practical matter, until the IRS has filed its tax lien and secured its interest in your property, it cannot direct what you do with the proceeds of the property you sell.

What was the Supreme Court case on tax liens?

Aquilino v. United States, 363 U.S. 509 (1960). However, whether the state-created interest constitutes property or rights to property to which the federal tax lien attaches is a matter of federal law. United States v. Bess, 357 U.S. 51 (1958).

What happens to a federal tax lien when you file bankruptcy?

Business — The lien attaches to all business property and to all rights to business property, including accounts receivable. Bankruptcy — If you file for bankruptcy, your tax debt, lien, and Notice of Federal Tax Lien may continue after the bankruptcy.

How can I get a tax lien removed from my tax return?

You can apply to have it withdrawn—which removes it from the public record—if you are in compliance on all your tax returns (personal and business) in the past three years and you are current on your estimated tax payments and federal tax deposits, as required. You may also be able to get the lien withdrawn before it is paid in full. How?

How can I get Out of a federal tax lien?

The IRS files a public document, the Notice of Federal Tax Lien, to alert creditors that the government has a legal right to your property. For more information, refer to Publication 594, The IRS Collection Process PDF . Paying your tax debt – in full – is the best way to get rid of a federal tax lien.