At GI Tax we understand that many people are nervous to prepare their own taxes. There are many confusing terms and rules you must follow, and we understand the confusion. One of these terms that makes most equal parts confused and terrified is the Federal Tax Lein. Have no fear, GI Tax is here to explain to you this term and what it means for you.

According to the IRS a Federal Tax Lein is: The government’s legal claim against your property when you neglect or fail to pay a tax debt.

This means that if you fail to pay your taxes the government can legally alert creditors that they have rights to your property. They can make it hard for you to get credit, affect your business, business property as well as gives the government rights to your accounts receivable. In addition, filing for bankruptcy will not erase your tax debt, lein or notice of lein.

It’s important to note that a lien is simply the government stating they have a right to your property. This is more serious than a warning, but affords you time to work with the IRS to pay your debt. If, however, nothing is done they will levy your property. That is to say they will seize or sell the property in question.

The best way to avoid a tax lein is to file and pay your taxes in full and on time. Having your taxes prepared by a professional at GI Tax ensures that you’ll know exactly what you owe and your payment options. If you’re nervous about filing your taxes and possibly facing a lein, don’t worry. Contact a professional at GI Tax. We can ensure you get what you’re owed and understand what you owe. It’s our goal to take the confusion out of taxes and protect you from the IRS!