Federal Tax Lien
A statutory claim by the IRS against all property and rights to property of a taxpayer with assessed but unpaid federal tax debt.
Detailed Explanation
A federal tax lien arises automatically when the IRS assesses a tax liability and the taxpayer fails to pay after demand. The Notice of Federal Tax Lien (Form 668(Y)) is recorded publicly with state and county recorders, harming credit and clouding title to real property. Lien withdrawal, subordination, and discharge are available under specific procedures (Form 12277 for withdrawal). Liens are released after the debt is paid, an offer in compromise is accepted, or the 10-year IRS statute of limitations expires (Collection Statute Expiration Date, CSED).
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Learn about IRS & State Tax ResolutionRelated Terms
IRS Installment Agreement
A formal payment plan with the IRS that allows taxpayers to pay tax debt over time, monthly, instead of in a single lump sum.
Offer in Compromise (OIC)
An IRS program that allows qualifying taxpayers to settle tax debt for less than the full amount owed, when full payment would create a financial hardship.
IRS Wage Garnishment
An IRS levy on a taxpayer's wages, requiring the employer to send a portion of each paycheck directly to the IRS until the debt is paid or the levy is released.
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