The Internal Revenue Service (IRS) usually follows the right procedures when handling tax liens, but not all the time. IRS tax liens can damage your credit and make it extremely difficult to get any further credit since they report it to the credit bureau. With that in place, you cannot hold any assets in your name either.
In order to release the lien, you either have to pay the tax with the interest and penalties attached or post a bond that guarantees payment. Even the process to remove the tax lien off your credit can still take 30 days.
With that being said, imagine if the IRS filed a tax lien against you without you having any knowledge of why?
This is what happened to an estimated 24,237 taxpayers where the liens were handled inappropriately and appeal rights wasn’t explained.
These numbers are surprising. Actually, one report states that the IRS have made errors on lien notices where the taxpayer has a lawyer, accountant or another type of manager who watches over their finances. You wouldn’t expect this, considering tax liens are very serious and have to be implemented with precision, not including the fact that you have educated professionals watching over your finances.
Celebrities aren’t even safe from the IRS. In 2015, Robert De Niro was a victim of a mishandled tax lien worth 6.4 million from 2013. In this case, the IRS mishandled the lien due to sending it to an old address, which is a common reason individuals get an unexpected tax lien from the IRS all the time.
To avoid further issues, just remember to file a form 8822, which is a change of address with the IRS so that you will not miss any important documents. This will save you lots of money and hassle. Also, understand that the longer you owe the IRS, the more money you’re going to have to pay out of pocket. So, we advise you to pay off balances as soon as possible to avoid massive interest charges. You even have the opportunity to set up an IRS payment plan if you’re not like Robert De Niro, and can’t afford to pay your balance off in full.
Not taking action towards a tax lien will bring about major consequences. We urge you to be very responsible when handling a situation as such.