Essential Knowledge on IRS and State Tax Liens Removal

Essential Knowledge on IRS and State Tax Liens Removal

Essential Knowledge of IRS and State Tax Liens Removal

If you owe back taxes to the IRS or your state, you may be at risk of having state tax liens placed on your property. A tax lien is a legal claim against your property that serves as security for the payment of your tax debt. It can affect your credit score, make it difficult to sell your property, and even result in the seizure of your assets.

In this article, we’ll try to examine how the IRS and state tax liens work, guide the removal process, and lay out the steps to take after receiving a notification.

Understanding Tax Lien

A tax lien is a legal claim against your property that is placed by the government when you owe back taxes. It is a way for the government to secure the payment of your tax debt. A tax lien can be placed on any property you own, including real estate, personal property, and financial assets.

Impact of a Tax Lien

A tax lien can have serious consequences for your financial well-being. It can negatively impact your credit score, making it difficult to obtain loans or credit cards. It can also make it challenging to sell your property, as the lien must be paid off before the sale can be completed.

In some cases, the government may even seize your assets to satisfy the tax debt. This can include bank accounts, vehicles, and other valuable possessions.

IRS Tax Liens

The IRS has the authority to place a tax lien on your property if you owe back taxes. This can happen if you fail to pay your taxes on time or if you fail to make arrangements to pay your tax debt.

How to Remove an IRS Tax Lien
How to Remove an IRS Tax Lien

How to Remove an IRS Tax Lien

The best way to remove an IRS tax lien is to pay off your tax debt in full. Once the debt is paid, the IRS will release the lien within 30 days. However, if you are unable to pay the full amount, there are other options available.

When you petition to remove an IRS lien, it gets rid of the lien’s public record. This means you can freely manage your property without the hassle of dealing with the lien.

Consequently, this advantageous move grants you a fresh feeling of liberty regarding the administration of your property with minimal blockages or disturbances triggered by the formerly present lien.

Successfully having the lien removed through the petition allows you to now operate with enhanced freedom and convenience in employing, governing, and creating resolutions regarding your estate, free of the onerous load that the lien previously imposed.

This is typically only granted if it is in the best interest of both the taxpayer and the government. You can also apply for a lien subordination, which permits other creditors to overtake the IRS in terms of priority over your properties. This can make it easier to obtain a loan or credit while the lien is still in place.

How to Avoid an IRS Tax Lien

The best way to avoid an IRS tax lien is to pay your taxes on time. If you are unable to pay in full, you can set up a payment plan with the IRS to make smaller, more manageable payments. This will prevent a tax lien from being placed on your property.

State Tax Liens

State tax liens are similar to IRS tax liens, but they are placed by state tax agencies instead of the federal government. Each state has its own laws and procedures for placing and removing tax liens.

How to Remove a State Tax Lien

In each person’s state, there exists a unique and distinct method by which a state tax lien may be removed from a person’s records. This procedure primarily revolves around two fundamental options.

Initially, a person can choose to handle and pay off the full tax obligation, thus completely eliminating the tax lien.

But there is another option available. You can make a payment plan with the state tax agency. This allows you to pay your taxes over time. Eventually, this will remove the tax lien from your financial records.

Several states also provide a tax lien discharge program, where taxpayers get the opportunity to pay a part of their tax liability in return for the removal of the lien.

How to Avoid a State Tax Lien

To avoid a state tax lien, it is important to pay your state taxes on time. If you are unable to pay in full, contact your state tax agency to discuss payment options.

Some states allow taxpayers to settle their taxes without penalties or interest charges through tax forgiveness programs.

What to Do If You Receive a Notice
What to Do If You Receive a Notice

What to Do If You Receive a Notice

Upon receiving a notice from your state tax agency or the IRS informing you of a tax lien against your property, it’s imperative to respond swiftly because ignoring the notice will only make the situation worse.

Contact the Tax Agency

The initial step to tackle the situation is to reach out and establish contact with the concerned tax agency that has placed the lien. By participating in this important communication, you can easily learn all the necessary information about the money you owe.

Similarly, you can also gain a deeper insight into the various options available to help you efficiently manage your financial debt.

Review the Notice

Carefully review the notice to ensure that all of the information is accurate. If you believe there is an error, you can dispute the lien with the tax agency.

Seek Professional Help

If you don’t know what to do or need help dealing with the tax agency, it might be good to get professional assistance.

Tax attorneys and accountants can provide guidance and help you navigate the process of removing a state tax lien.

Tax Lien Properties
Tax Lien Properties

Tax Lien Properties

A tax lien is when the government puts a legal claim on a property because the owner hasn’t paid taxes. This makes the property into a tax lien property.

In essence, this implies that the current property owner is prohibited from conducting any sale or transfer operations until the outstanding tax lien is completely settled.

But in some cases, if the property owner doesn’t pay their taxes, the government can take the property and sell it to pay off the debt.

How to Buy a Tax Lien Property

If you are interested in purchasing a tax lien property, you can do so through a tax lien auction. These auctions are typically held by the county or state and allow investors to bid on the tax lien. If the lien is not redeemed by the property owner, the investor can foreclose on the property and take ownership.


As the 2024 tax season commences nationwide on Monday, the Internal Revenue Service (IRS) introduces new services aimed at simplifying the filing process for taxpayers. These include Free File and Direct File programs, made possible by additional funding from the Inflation Reduction Act.

The Free File initiative aids individuals earning $79,000 or less by providing them with no-cost tax software from the IRS. Tax filing using this method is entirely free. The Direct File service is a free service that allows residents of select states to file their federal tax returns. This service includes a beneficial guide.

The IRS has also expanded in-person services through Taxpayer Assistance Centers, with 50 centers operating with extended hours. Electronic filing with direct deposit remains the recommended option, with almost 129 million individual tax returns expected this season.

Conclusion ()


Dealing with IRS and state tax liens can be a stressful and overwhelming experience.

However, by learning ways to remove a state tax lien and recognizing your choices, you can protect your assets and financial wellbeing.

Upon receiving a tax lien notice, it’s crucial to promptly take necessary measures and solicit professional assistance if required. With the right approach, you can successfully remove a tax lien and avoid the negative consequences that come with it.

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