Tax liens complicate both business and personal finances. Efforts to obtain new property, sell property or open new lines of credit suffer when a tax lien exists on your business assets. The first step to addressing this issue is understanding what a tax lien is. Then, you can decide the best way to resolve it.
What is a tax lien?
At the Federal level, a tax lien exists when the IRS sends a bill for a tax debt, and someone either neglects or refuses to pay. Then, the IRS alerts creditors of the tax obligation by filing a public document called a Notice of Federal Tax Lien. The notice can make it very difficult to obtain new lines of credit for your business until the lien is paid off. It also gives the IRS the right to make a claim for business assets, including accounts receivable. A lien from the state of Georgia follows a similar process.
How to get rid of a tax lien
The quickest way to remove a tax lien is to pay the amount demanded. However, in some cases, there may be grounds to have some or all the debt discharged, which a tax attorney can help you do by:
- Challenging the accuracy of the tax amount
- Finding filing defects
- Establishing an alternative payment plan
In select instances, the lien can be withdrawn. When that happens, the business’s tax record appears as if the lien never happened.
A tax lien is a serious matter for your business. If the IRS or state government notifies you of a tax lien on your business assets, don’t panic. Consulting with an experienced tax attorney can help you create a plan that will address the issue quickly.