If you have not paid your taxes by their respective due dates, you are subject to serious collection methods by the IRS.  One of which is a delinquent tax lien.  This can be very intimidating and can literally destroy your credit and financial future if not addressed immediately.

A delinquent tax lien puts a hold on your property and assets, which means if you try to sell anything, the IRS will get the money first.  However, you didn’t get a delinquent tax lien out of the blue!  The IRS sends numerous letters alerting you to the delinquent tax bill way before they deploy this collection method.

Keep in mind the IRS is only required to send these letters to the last known address you have on file with them.  If you moved and didn’t put in a forwarding address, you cannot use that as an excuse for not getting the notices.  It’s not like a Personal Protection Order that has to actually be served before the courts consider it active.  An IRS delinquent tax lien does not actually have to be served to you, it only needs to have been sent to your last known address and it is activated.

You should contact a tax professional upon receiving your first letter from the IRS and if you didn’t receive the letters, then immediately after finding out about the delinquent tax lien.  You may be able to work out an installment agreement with the IRS, or even an offer in compromise.

• Installment agreement:  you and the IRS decide on an amount that you can afford to pay each month in order to pay off your debt.  (Usually within a five year period)
• Offer in Compromise: You prove that you are not able to pay the full amount owed, but that you are able to pay a lesser amount. This is a complex process and should involve a qualified tax professional to assist you.

The next step after a delinquent tax lien is an IRS Levy.  A levy is a notice that the IRS intends to seize your assets and property.  This is the typical action following a lien, if you make no effort to contact the IRS and settle your tax debt.  Obviously the IRS does not want to bother with trying to sell off your property in order to collect on your debt if there is another way.  You need to contact them and find a mutually agreeable way to pay your taxes.

You should also know that a delinquent tax lien does show up on your credit report!  Even after you pay your debt to the IRS and they remove the lien, it will continue to show up on your credit reports.  The IRS will send you a release notice and it is then up to you to contact the credit reporting agencies to have the lien removed from your credit reports.

It can be a nightmare situation and one that should definitely be avoided if at all possible!  Communicate with the IRS the moment you see that you are behind on your taxes!  ?