IRS raises threshold for imposing tax liens

The IRS recently announced that it will adjust its use of tax liens to collect back taxes. A federal tax lien gives the IRS a claim on a delinquent taxpayer‹s property for unpaid taxes.

This change means the IRS won’t use a tax lien unless at least $10,000 in back taxes is owed; the previous threshold had been $5,000.

In addition, the IRS says it will “withdraw” more tax liens once the back taxes have been paid. A withdrawal removes the lien from the taxpayer’s credit record, whereas a lien “release” as previously used left the lien on the credit record for at least seven years. Having a tax lien on a taxpayer’s credit record can knock 100 points off the individual’s credit score.

The IRS estimates that the new rules mean that “tens of thousands of people won’t be burdened by liens.”

Questions?

Contact us or call: 650-344-6525.

Tagged with:

Leave a Reply

*