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Salt Lake City Tax Attorneys Help Utahns Respond to Tax Liens and Tax Levies

What to know when tax authorities threaten a lien or a levy

News that the Internal Revenue Service (IRS) or Utah State Tax Commission is taking the reins to your property is unnerving, to say the least. Our legal team at Huntsman | Lofgran helps you make your case to the government, while seeking to achieve a resolution that benefits both parties. Our law firm provides big-firm capabilities with a small-firm, more personal level of attention.

The first shoe to drop: the tax lien

Once the IRS decides your taxes have fallen sufficiently in arrears, it sends you a Notice of Federal Tax Lien (the Utah State Tax Commission sends you a Notice of Lien). The lien does not take your property from you; it simply means the government is securing your property against the debt you owe it. Tax authorities are not required to go to court to impose a lien. The easiest way to remove a lien is to simply pay off your obligation in full — including any back taxes, interest or penalties. Absent that, you are stuck with the lien. Besides clearing the way for the government to take your property before any other creditor, the lien also:

  • Appears as a big negative on your credit report. Once the lien is removed from your property, your credit report shows the lien as paid and released, but the lien entry itself is not removed for at least another seven years. It’s not just federal tax liens that show up — credit reporting agencies have access to state and county tax authority records, too.
  • Attaches to all business property, including accounts receivable.
  • Survives bankruptcy. Your tax debt, lien and Notice of Federal Tax Lien may be waiting for you on the other side of a bankruptcy discharge.

You may be able to negotiate a tax lien in special situations, such as:

  • Discharge of property — The government may agree to let you discharge certain property from the purview of the lien, particularly if you intend to sell the property to help pay down your debt.
  • Subordination — A subordination of the lien does not remove the lien, but allows other creditors to move ahead of the tax authority, which may make it easier for you to get a loan or mortgage.

The other shoe: the tax levy

While a lien secures the government’s interest in your property, a levy permits the government to seize your property. One example of a levy is wage garnishment. Another is the bank account levy. The federal government can also commandeer your federal and state income tax refund checks as well.

The IRS and the Utah State Tax Commission have the right to levy up to 100 percent of any asset you or your business owns to collect on your tax debt. As with a lien, the tax authority does not need to go to court to levy your property.

Retain a firm that has successfully defended individuals and businesses with wage or bank account levies

Even if you have already been served with a lien or a levy, it’s not too late to put things in order with the IRS or Utah State Tax Commission. To arrange for a free and thorough consultation about how we help resolve tax lien and levy problems, contact us online or call our offices at 801-474-0031 today. At Huntsman | Lofgran, our Salt Lake City office hours are Monday through Friday from 8:30 a.m. to 5:30 p.m.