IRS Lien Basics

An IRS lien is a means for the IRS to secure payment for any tax debt and can stay in place for as long as 10 years. While it is in effect, any proceeds from the sale of property, real, personal, or even a “right in” property (such as an inheritance), must be paid to the IRS. Given the serious consequences of a tax lien, it is important to understand and evaluate options based on taxpayer’s unique situation.

A lien begins with a tax assessment, requires the IRS to give public notice of the lien and a payer/buyer to direct payments to the IRS toward the tax assessment, instead of to the taxpayer, the selling property owner. In essence, it places the IRS directly in the path of and prevents the taxpayer from receiving money from purchasers until the IRS has been paid. While it may appear obvious to avoid tax liens by paying the IRS, there are often legitimate reasons to dispute a tax lien or assessment. And the terms “notice” and “property” may seem straight forward but may be interpreted differently by the IRS, the tax payer, the state and federal laws, rules, regulations and procedures. In other words, talking about a “Basic” IRS Lien is an oxymoron.