Tax Issues and You: Q & A
With Stephen Weisberg of The W Tax Group
Question: I just received notice of a tax lien on my house. What should I do?
Answer: The IRS files a tax lien to help them collect back taxes from you. The lien attaches to all real property (houses) and personal property (jewelry, cars, etc) you own. The lien makes it so if you were ever to sell anything you own, the IRS would be entitled to the money you would have made from the sale. The first thing you should do is call a tax professional. Someone who can help you with your tax debt before the IRS takes even more drastic measures to collect from you including wage garnishment or bank levy.
Once a tax lien is filed, there are only two ways to have it removed: 1) pay the tax debt off or 2) pay down your debt below $25,000 and negotiate a direct debit payment plan in which you pay the IRS the amount you owe over 72 months. A direct debit payment plan means the payments come directly from your bank account. Once you negotiate this installment Agreement, you still need to make 3 monthly payments in a row. At that time, you can formally request the IRS to release the lien.
Remember though, the lien is not the end of your story - the IRS will take more drastic collection actions next. My tax debt pro tip is that you want to resolve your tax debt BEFORE a tax lien is filed. AS you see, there are few options for removing it.
Question: I am behind in my taxes and cannot afford to pay them. What are my options?
Answer: If you’re behind on your taxes, the first thing you should do is called a tax professional with expertise in tax collections. There are many options for resolution but you need a licensed tax professional to get you the most favorable outcome.
Resolutions include an Installment Agreement (monthly payment plans over time), penalty abatement, a Partial Pay Installment Agreement (monthly payment plan where the taxpayer never pays off their debt), Offer in Compromise and more, all depending on your personal circumstances.
The general idea behind a monthly payments plan is easy to understand but each case has specific circumstances which may dictate the length of the payment plan, the amount paid each month, whether you are required to pay off your entire debt, and how the payments are made. When negotiating a payment plan, there are many options. If you are unaware of your options, the IRS is going to require you to pay as much as possible.
Stephen Weisberg, lead tax attorney at The W Tax Group, represents individual and business taxpayers nationwide successfully resolving cases with an in depth understanding of the Internal Revenue Manual. Stephen prides himself on being able to provide his clients with peace of mind during an extremely difficult time. He is a member of the State Bar of Michigan.