As the tax season approaches, you find yourself more and more overwhelmed by the financial burden of this unexpected tax debt. To make matters worse, you know that if left unaddressed, this tax debt could lead to a federal tax lien.
Luckily, if you’re looking to have the lien removed, you have options. At Instant Tax Solutions, we can help you find the best solution for removing your pending (or existing) lien, and our federal & state tax lien removal service proudly boasts over a decade of experience in assisting individuals (and businesses) to regain full access to their property.
So don’t hesitate to reach out to our Boise tax debt relief attorneys today. Call (888) 485-8109 to schedule your free appointment today.
Working With a Boise Federal & State Tax Lien Removal Service
Put in simple terms, a tax lien is a legal claim placed on your assets. These assets may include your property, bank accounts, or personal belongings.
In effect, the lien is placed to ensure that you repay your debt, and it’s the government’s way of asserting its legal right to your property — when you fail to pay your taxes.
This means that if you neglect or refuse to pay your full federal tax debt, the IRS can establish a lien against your assets. If you’re hoping to sell your home, this can prevent you from doing so, and it’s safe to say a lien is a serious financial burden.
A lien can also be the first step in a seizure and sale of the property
What to Do and How to Get a Lien Removed
If the IRS has placed a lien on your property, it’s important to start working with an experienced tax expert as soon as possible because tax liens, whether federal or state, always carry serious consequences.
Of course, one of the most immediate concerns with tax liens is the possibility of actual asset seizure. If you continue to neglect your tax debt, the government may have the right to seize — and sell — your property, including your home, car, or other assets.
Additionally, tax liens can severely damage your credit score. When a lien is filed, it becomes a matter of public record, and while it may not end up directly on your credit report, it could nevertheless make it challenging to secure loans, credit cards, or favorable interest rates.
If you’re a business owner, having your credit affected by a lien can lead to even worse consequences. Without the ability to secure loans or strong lines of credit, you may not be able to access the financing you need for future growth or day-to-day operations.
Similarly, a tax lien could also erode the trust you’ve built with suppliers and vendors, who may demand stricter payment terms — or even sever ties — with your business.
So whether you’re working with a federal tax lien from the IRS or a state tax lien in Boise, you’ll want to take prompt action to resolve your tax debt (and explore lien removal options) as soon as possible.
State Tax Lien vs. Federal Tax Lien
In order to have your lien removed, we’ll first need to determine what kind of lien you’re working with.
A tax lien is like a safety net for creditors. It’s a legal mechanism used by government authorities to force taxpayers to repay their outstanding debts, and it reminds users that the government has a legal claim to their assets if they fail to meet their financial obligations.
State revenue agencies are also often quicker to seize and sell assets affected by a lien if the property owner continues to leave owed taxes unpaid. In Idaho, the period is three years, and then the state or county agency can take title of the property through a tax deed.
For example, imagine you owe a significant amount in federal or state taxes, and despite repeated notices and reminders, you haven’t been able to settle your debt. To protect their interests and recoup the owed funds, the government can establish a lien on your assets, essentially stating, “These assets are collateral until you pay what you owe.”
That said, while both federal and state tax liens serve the same fundamental purpose of securing unpaid tax debts, they will differ in their scope and authority.
Federal Tax Liens
A federal tax lien is issued by the IRS on behalf of the federal government. When you neglect (or refuse) to pay your federal taxes, the IRS sends you notices and, if necessary, files a Notice of Federal Tax Lien—a public document that alerts creditors of the government’s legal claim to your property.
State Tax Lien
State tax liens, on the other hand, are specific to individual states. In Idaho, for instance, the Idaho State Tax Commission may impose a lien if you have unpaid state or county taxes. These liens are subject to state laws and regulations and may include the following:
- Idaho Income Tax Lien: If you owe Idaho state income taxes and neglect to pay them, the Idaho State Tax Commission may place a lien on your assets to ensure you repay your debt.
- Idaho Sales Tax Lien: Businesses in Boise and throughout Idaho are responsible for collecting and remitting state sales taxes. If a business fails to meet its sales tax obligations, the Idaho State Tax Commission may impose a sales tax lien, which can affect the business’s assets and financial operations.
- Idaho Property Tax Lien: Property owners in Boise are subject to property taxes levied by local governments and school districts. So, if you don’t pay your taxes and the county places a property tax lien on your real estate, you could lose your home.
- Idaho Business Tax Lien: Boise businesses must comply with various state tax requirements, including corporate income tax, payroll tax, and other business-related taxes. Failure to do so may result in a Business Tax Lien.
Is It More Difficult to Remove a State or Federal Tax Lien?
The difficulty of removing a tax lien, whether federal or state, can depend on various factors, including the nature of the debt, the assets involved, and your specific financial situation. There’s no definitive answer to whether federal or state tax liens are more challenging to remove, as both can pose significant obstacles.
Removal Options for Federal Tax Liens
There are several ways to have your federal tax liens removed, but the most straightforward option is to simply pay your outstanding debt in full. Once you’ve satisfied the debt, the IRS typically releases the lien within 30 days.
This approach provides a clean slate, and you regain full control of your assets. That said, most taxpayers will not have funds on hand to pay their debt in one fell swoop.
Luckily, there are other options.
For example, in some situations, the IRS will offer to ‘discharge’ specific property from your federal tax lien. This means that they will remove the lien from a particular asset, though typically in connection with its sale, refinance, or transfer.
Keep in mind that the IRS will usually specify terms for the discharge, which may include allocating a portion of the proceeds from the sale to your tax debt.
In other cases, it might be beneficial to request a “subordination” of the federal tax lien. This doesn’t remove the lien but allows other creditors to take priority over the IRS, which can make it easier for the taxpayer to secure a loan or mortgage.
A ‘withdrawal’ is another powerful option. It not only removes the public Notice of Federal Tax Lien but also assures that the IRS does not compete with other creditors for your property.
However, you will still remain liable for your tax debt even after a withdrawal, and there are specific eligibility criteria for a withdrawal.
Removal Options for State Tax Liens
In Idaho, taxpayers looking to have a state tax lien removed can take advantage of any of the options outlined above for removing a federal lien. However, they can also pursue a few additional options:
Negotiating a Payment Plan
In some cases, it may be challenging to pay the entire tax debt upfront. State tax authorities often offer taxpayers the option to negotiate a payment plan, which will allow you to pay your debt off over time in manageable installments.
Offer in Compromise
An Offer in Compromise (OIC) is a potential option for individuals and businesses struggling to pay their state tax debt in full. With an OIC, you can propose a settlement amount that is less than the total debt you owe.
If the state tax authority accepts your offer, you can resolve the debt and have the lien removed.
Challenging the Lien
If you believe that the total tax debt you owe is incorrect, you may want to challenge the lien. In some situations, an error may have been made while calculating your total debt, or you may find that your return was filed with missing deductions.
Similarly, tax authorities must adhere to specific procedures when filing tax liens. Any deviation or procedural error in the lien process can provide grounds for challenging the lien’s validity.
Contact our Team for Federal and State Tax Lien Removal Help Today
Regardless of whether you’re dealing with a federal or state tax line, it’s important to address the issue today. At Instant Tax Solutions, we’re here to help and can help you narrow down your options so you can pursue the best path forward.
So don’t hesitate to reach out to our team today. Call (888) 485-8109 or contact us online to schedule your free appointment today.
