An IRS Tax Lien is a legal claim on your property for the amount owed. It is also the legal right to collect on the amount owed.

An IRS Tax lien starts when a tax is assessed and you don’t pay it. Let’s go over a quick example to help you understand…

If you file a tax return owing $50,000 and you do not pay it, then you will “assessed” the tax, penalty, and interest on that $50,000.

At this point, the IRS will send a “Notice and Demand” asking you to pay the assessed balance, and you’re typically given 10 days to pay up.

If you do not pay it within the 10 days, then a lien arises automatically dating back to the time the initial assessment was made. 

Keep in mind, the IRS doesn’t need to file its tax lien before it garnishes wages or levies bank accounts. Contact a professional for a free consultation to learn about your options.