Clearing a Federal Tax Lien in Philadelphia

Are you the recent recipient of a Federal Tax Lien from the Internal Revenue Service against your Philadelphia area property? Or has the Internal Revenue Service threatened you repeatedly to attach such a lien against your Philadelphia area property if you do not pay your Federal Income Taxes right away? In all likelihood, you are probably unable to pay your Federal Tax Debt, angry at the Internal Revenue Service and more than a little frightened about the consequences the Federal Tax Lien will create for you.

Should the Internal Revenue Service attach a Federal Tax Lien against your property, you will receive written notice that confirms:

  • The property address against which the Federal Tax Lien is filed;
  • The Federal Tax Lien amount;
  • The county in which the lien is recorded; and
  • Contact information for the IRS.

Federal Tax Liens: What Are They? Why does the Internal Revenue Service Use Them?

In layman’s terms, a Federal Tax Lien is an insurance policy that the Internal Revenue Service uses to increase their odds of getting money from you to pay-off your Federal Tax Debt. More precisely, the Federal Tax Lien is a binding legal document that gives the IRS first priority to receive money from the eventual sale of your property—priority ahead of you, the property owner. Once your property is sold, whether that happens tomorrow or years from now, the Internal Revenue Service will legally get full payment of the Federal Tax Lien from the sale of your home before you ever get a dime. And it is possible that the profit from the sale of your home may not completely cover your Federal Tax Lien, in which case you will still owe the Internal Revenue Service more money! So it is possible that you might not receive any proceeds from the sale of your own home. For most Philadelphians, this is unthinkable that their greatest asset—their home—is at risk.

Just because the Internal Revenue Service has attached a Federal Tax Lien against your property, they probably are not done harassing you and attempting to collect your Federal Tax debt.  Internal Revenue Service agents are nothing if not determined; they will not leave you alone until they obtain every possible dollar required to pay-off your Federal Tax Debt. A Federal Tax Lien is one of their most powerful tools to attempt to collect your debt, and its effects on you and your family can be significant:

  • Expect that your Federal Tax Lien may appear in any or all of the three major credit report agencies’ (Equifax, Experian, and TransUnion) files. Once it does, you may see your credit score drop considerably. This could raise your interest rates on future loans or cause you to be denied credit, insurance or employment.
  • Expect your opportunities to sell your home to be drastically impacted. Any homeowner understands the simple process of selling one’s home: find a buyer; agree on a contract; close the sale; pay off whatever the mortgage company is still due; and deposit your profit in the bank. Everything changes with a Federal Tax Lien.  Now, once you do sell your home, any profit first goes to the Internal Revenue Service—ahead of the mortgage company and you—until the Federal Tax Lien is paid-off.  Whatever profits you’d been dreaming of just changed.
  • Believe it or not, the Federal Tax Lien often keeps you from paying-off your Federal Tax Debt. For example, should you realize that you could never pay your Federal Tax Debt on your current salary, you might look for a better paying job. If you find one that happens to be in another city or state. All you need to do is sell your home, buy a new one closer to your new job, and pay off your Federal Tax Debt quickly, right? Wrong. You will never be able to take that higher paying job because you cannot sell your home without immediately paying the Federal Tax Lien. Once you pay the Lien from the proceeds of the sale of your home, you probably will not have the money to buy a new home closer to that great job, and you have lost the home near your current job. Thanks to your Federal Tax Lien, you are stuck in your current home until you have the money to pay your debt to the Internal Revenue Service.
  • Like many Philadelphians, you may still be paying on your mortgage. Should you sell your home before it is completely paid off, you would expect the sale of your home to yield enough profit to pay-off your mortgage, right? Think again. With a Federal Tax Lien in place, the funds available to you after the Lien is paid-off often are not enough to pay-off your mortgage. Do you realize what that means? You will still be paying on a home you do not own anymore, while still needing another home to live in. This is a nightmare.

So how can I remove a Federal Tax Lien from my property?

First and foremost, contact a Philadelphia attorney licensed in Federal Tax law. No matter what financial problems you may have had before, this one is different: you are not fighting a bank or a creditor; you are fighting the Internal Revenue Service. In effect, you are fighting the United States Federal Government. This is serious, and you need serious help. The Internal Revenue Service is highly skilled at collecting as much as possible from taxpayers, regardless of how it impacts real people like you and those you love. But an attorney licensed to practice Tax Law in Philadelphia can advise you on options that the Internal Revenue Service often does not offer you. For instance, your attorney can advise you that the Internal Revenue Service would rather get partial payment of your debt, even a token amount, than get no payment at all. Such a settlement requires skilled, experienced negotiations.  You can expect the Internal Revenue Service to get more and more aggressive in its efforts to collect what they maintain you owe them. Are you really prepared, on your own, to fight them and win?

You need someone to help you fight for your rights and the best possible settlement. We can help you find an advocate to fight for you.