Tax Liens and Tax Lien Certificates

So how do I do a Tax Debt Settlement?

Tax debt relief is a term that refers to measures that can be taken in order to get rid of debt that results from unpaid taxes.  Settling those debts is complicated process, especially since you have to keep paying taxes evey year. There is no way you can erase your debt completely, but there are several things you can do to make the repayment process easier and manageable.

As long as you follow the rules and pay everything on time, you should eventually be able to get rid of your debt. Getting the paperwork in order before you send out to repay your taxes, you need to get a sense of what you will be facing.

Find all your tax forms and organise everything. Once that’s finished, there are several things you can do in order to get tax debt relief.

Installment Agreement

This is a payment plan that allows you to pay off your debt in monthly portion (the installments).  When you agree to monthly intallments, you agree to pay a certain amount evey month. That amount is equal to the total value of your debt divided by thirty. You must be able to pay off the total debt over a thirty-six months period that starts when you sign the installments agreements.  In order to qualify for the installment agreement, you must meet several requirments.

They include : No other obligations-all your taxes must be filled and you can’t have another installment agreement.  Generally good record-if you filled your tax forms late and paid your taxes late anytime during the five years prior to the most recent tax year, you would not be qualified for an installment agreement.

Offer In Comprise

This is a program, where you agree to repay a portion of your debt. The rest will be forgiven. In order to qualify, you must prove to the IRS that you either don’t have the money to pay off all the debt.

Not Currently Collectiable Under this program, the IRS agrees not to collect on your tax debt fo a year due to your financial hardship. You can apply for it by filling Form-433-F. This won’t reduce you debt, but if does give you time to find some way to repay it.

Hiring a tax professional

If you owe IRS over $125,000,you should consider hiring an experienced tax professional. A tax professional will use his or her expertise to help you through any and all of the tax relief programs listed above. A tax profesional must be a licensed as either a Certified Public Accountant or an Enrolled Agent or tax attorney.

How do you purchase tax lien certificates?

If you are considering a unique type of investment that is likely to provide you with numerous benefits, you should consider purchasing tax lien certificates. This type of lien certificate indicates that a lien has been placed on a property when the individual or business that owns that property has failed to pay the property taxes. Real estate owners are obligated to pay taxes annually on the property that they own. Those that fail to respond to this financial obligation in full and on time are subjected to having tax lien certificates placed on the property.

In most circumstances, the government that is associated with the county in which the real estate is located will allow a certain time frame to pass prior to initiating tax lien certificates on the property. However, once this time has passed, the county will make it known to the public that an auction will be held due to the tax lien. Individual investors in and around the community may pay the taxes on behalf of the actual owner of the property. The auction is held in a typical bid auction fashion.

The person that is named as the “winner” will actually receive the tax lien certificates associated with the bids that they placed and won on in order to establish a legal “Proof of Purchase”.

Once you are in possession of the tax lien certificates that you have purchased through a public auction, you will go through a waiting process. If the property owner handles the tax obligation, they will also have to pay interest. You will be requested to return any tax lien certificates that have been paid in this manner and will get a check for the amount you paid for them as well as any interest legally owed to you. If the owner fails to pay their obligation after a designated amount of time, you will eventually gain complete ownership over the property.  Gaining ownership of the property is uncommon, but it is known to happen.

Browse around our site to find out more Tax Lien Information.

Don’t let them lie to you. Federal tax liens can be removed!

Naturally, the best way to get a Federal Tax Lien removed is to pay the tax due. When the tax has been paid the IRS will send you a, “Notice of Release of Federal Tax Lien,” which can be taken to the court house and filed with the recorder’s office and the lien will be removed. Usually all releases of Federal Tax Liens are done by payment of the tax due. However, if a taxpayer has no means to pay the tax they have the right to file an “Offer-In-Compromise,” and attempt to settle with the IRS for pennies on the dollar. This is a difficult process but can be accomplished please see IRS tax lien help for more information.

Other than the Offer-In-Compromise, a taxpayer can file for, “Innocent Spouse Relief,” which is possible when one spouse commits acts of fraud or deceives in any other way, the other spouse. The “Innocent” spouse can get a portion or all of the tax abated. If the tax is abated then the liens are automatically removed. If there is percentage abatement then the tax must be paid before the lien is removed.

Finally, the IRS has a “Statute of Limitations” when collecting unpaid taxes. If the IRS does not collect the tax within 10 years from the date of assessment the tax debt falls off the system and the taxpayers owes nothing for the debt. The lien will then automatically be released.