Having your own business demands every bit of your attention, so it is no wonder that payments are forgotten or not made from time to time. Unfortunately, state tax payments are often one of these things. If you have failed to pay state taxes when they are due, you are running the risk of having a state tax lien filed against you.
Whether you have already been notified of a tax lien or you think there is a good chance of one being filed, the most important step is to become informed. Here you will come to understand what a tax lien issued from the state is and what you can do to take care of it.
A state tax lien is a public record that notifies creditors and the public that the state has a right to your assets.
These liens are a public document. That means your business name will be listed along with the type of taxes and the dollar amount of back taxes owed when the lien is filed.
Typically, states will send you a series of notices – the first about your outstanding tax debt, the next about their intent to file a tax lien. Once the lien is actually filed as a public record, states typically send a certified notice to you at the business address listed in your tax records.
HOW DOES A STATE TAX LIEN AFFECT YOU?
Most importantly, you should know that a lien gives the state the right to seize and sell your assets. However, the state can seize your assets without a lien filing. This is a super-charged power that you need to be aware of if your business owes taxes.
A lien will also be available to credit-reporting agencies, meaning it may affect your ability to obtain future credit as you could be seen as a high-risk borrower. For example, even if you pay the tax debt in full, and the lien is removed by the state, your credit report will still indicate that a tax lien was filed against you.
WHAT TO DO ABOUT A STATE TAX LIEN?
Depending on your situation, there are different strategies that a tax professional could assist you with.
You can remove, withdraw or even prevent a tax lien from being filed. It is most important that you take a step back and look at the entire tax-debt situation. To read more about your resolution options, download our free guide on how to release tax liens.
If you feel you are ready to begin your resolution, you can speak with a tax expert today.
The threat or notification of a state lien means that it’s time to do something to resolve the tax debt. This requires a strategy and a plan to get the best possible outcome. Let 20/20 be your guide in reaching your resolution.
Connect with a tax expert about your tax lien situation.
"Staff was friendly, knowledgeable, and kept me informed of the process and progress. The outcome was positive for which I am very thankful."