A lien is one of the first steps the IRS or State Agency takes to start collecting on your debt to them. It grants the government a priority claim on your property. A lien covers all assets for the entity the lien is placed against. Liens also affect your ability to get credit, and can even continue after bankruptcy.

A lien is how the IRS or State Agency paves the way to take what is yours if you owe them. Imagine you are trying to sell your car. If the buyer knows that you have a Notice of Federal Tax Lien placed against you, then instead of the buyer handing you the money, they hand it all to the government instead. This will continue until your debt has been paid, plus interest and penalties.

A Notice of Federal Tax Lien can be filed against someone only after the IRS has assessed a balance that is due, has sent a Notice and Demand for Payment, and you have neglected or refused to fully pay the debt back in time. These Notice’s are part of the public record, and inform all creditors that the government has priority claim to assets under the lien.

A lien can be released if the debt is fully paid, the payment terms for an Offer in Compromise that the IRS has accepted are met, or the statue of limitations for the collection has passed. A lien can be withdrawn, or removed from the public record, if you have entered into an Installment Agreement with the IRS, it will help you pay your taxes faster, the IRS improperly placed a lien against you, or it is in the best interest of the government.