What Is A Tax Lien And When It Is Used?

By Gray Rollins

A lien is defined as the right to hold or sell property that is owned by an individual who owes debt. The property is often sold to make payment on the debt or the property is held as security until the debt is paid off. There are many financial institutions that use a lien to obtain the amount of money owned to them. In addition to financial institutions, the federal government also uses tax liens to obtain money until their debt is paid off in full.

When the federal government makes a tax lien claim on a property, there is really nothing a taxpayer can do besides pay the amount of money they owe or try to work something out with the Internal Revenue Service (IRS). Since the Internal Revenue Service (IRS) is mostly interested in getting their money and nothing else, taxpayers may wish to hire the services of a professional tax attorney. Professional tax attorneys are experienced with dealing with the Internal Revenue Service (IRS) and developing a solution that benefits everyone involved.

When the government takes hold of a property they have a number of things they can do. Most county governments offer what is called a tax sales auction. This auction is open to the general public and the public can purchase the property or purchase a debt that will be later paid off. When an individual is purchasing the debt instead of the property it is as if they are loaning money to the taxpayer who is behind on their taxes owed. The individual who agrees to pay the amount of taxes due on the property will have their name placed on a lien certificate. This certificate will be used in case a property owner still is unable to make good on the amount of money he or she owes. At this time the individual who purchased a lien on the property has the right to foreclose on the property if they wish to do so.

In addition to auctions where only a lien certificate is purchased, there are tax lien property sales. These sales are also open to the general public and they are often performed as an auction. When an individual is the winning bidder at deed sale they become the new owners of the property. These new property owners will not be responsible for any previous mortgages or previous liens.

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A tax lien is often imposed by the government as one last chance to try and obtain the amount of money a property owner owes them. Once a lien tax has been filed against an individual and their property, their credit may be damaged. A lien imposed by the government often prevents individuals from being able to purchase new properties, new vehicles, or even lease an apartment. If you are unable to pay the amount of money owed on your taxes it is important you contact a tax attorney today. Take action now and learn about your tax lien options before it becomes too late.

About the Author: Gray Rollins is a featured writer for the TaxHelpDirectory.com. To learn more about

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