what the irs can do
in the u s the irs may place a lien against a taxpayer s home vehicle and bank accounts if federal tax payments are delinquent and there has been no demonstrated effort to pay the taxes owed a federal tax lien has precedence over all other creditors claims it also makes it difficult for the taxpayer to sell the assets or to obtain credit the only way to release a federal tax lien is to fully pay the tax owed or reach a settlement with the irs once a lien has been filed it used to show up on the taxpayer s credit report damaging the person s credit score this could also prevent the taxpayer from selling or refinancing any assets to which liens have been attached note that since 2018 the three major credit reporting agencies have stopped including tax liens on credit reports 2if the taxes remain unpaid the tax authority can use a tax levy to legally seize the taxpayer s assets in order to collect the money it is owed while a lien secures the government s interest or claim in the property a levy permits the government to seize and sell the property in order to pay the tax debt 1the lien will remain in place until the tax bill is resolved or the statute of limitations on the debt expires getting out of a tax lienthe simplest way to get out of a federal tax lien is to pay the taxes owed tax liens are publicly recorded after a tax debtor pays off the debt the county records will be updated to reflect the fact that the lien has been released however if this is not possible there are other ways to deal with a lien with the cooperation of the irs if repaying the taxes is simply impossible the taxpayer must pay as much of the debt as possible and seek dismissal of the balance in bankruptcy court can tax liens be purchased in many localities and states public tax debt can be sold through auctions known as tax lien sales at auctions third parties can bid on liens and buy them from munipalities and states after such a transfer occurs the property owner will owe unpaid taxes and interest to the third party purchaser of their lien going forward a good understanding of tax lien investing and the local real estate market is important 