Income Tax Lien- You Can Pay It In Many WaysHandling tax liability of a consumer is one of the most complicated aspects of consumer bankruptcy laws. By creating income tax lien government claims its right to your property to recover the dues, if any. An income tax lien depends upon several factors like the nature, status of liability and kind of bankruptcy. In order to steer clear off an income tax lien, bankruptcy code offers various substantial income tax reliefs to tax debtors. If you don't pay your income tax bills timely, you receive a notice. This notice begins the collection process. The collection procedure goes through various alternative payment procedures and continues till the settlement of your account. The first notice explains the reason of your due and asks to pay the amount due in full within a specified period. The specified amount includes due tax plus penalties with interest added to unpaid balance. You should pay this to IRS (Internal Revenue Service), which administers Internal Revenue Code. Payments can be made by check or money order payable to United States Treasury with a copy of your notice. If you can't pay the dues in full at one time, you should pay in part. The unpaid due is subjected to interest that is compounded on daily basis. Beside the interest, late payment penalty is also imposed monthly. Therefore, it is better to pay tax liability at the earliest to minimize interest and penalty amount. To pay your dues, you can also use bank loan or credit card. The interest you pay for these facilities is lower than total late payments being imposed upon you. This also saves your credit rating from being low. You can also pay dues in monthly installments to avoid income tax lien. Under this option, you attach voided checks with your request. These checks are submitted to your account monthly. In case you are passing through significant financial crisis, you can request IRS to extend the payment period. IRS may temporarily suspend Income Tax Liens. However, interest or late payment charges will continue to occur. As an armed forces employee, you may also request to defer income tax lien, if your paying capability was affected during military service. After failing to qualify for installment agreement, you may request for compromise offer. OIC, Offer In Compromise, is an agreement between taxpayer and IRS. It terminates income tax lien for a short period. IRS reserves the right to compromise or settle income tax due to release income tax lien. Before appealing to the IRS, you should have complete documentation to prove your current income and expenses. This will make the job of IRS easy. Just after receiving income tax lien notice, it is important to contact IRS at the earliest possible. If you don't show your interest to repay your due income taxes, IRS will take enforced collection actions to recover tax dues. Tax Lien Help >> Legal Disclaimer >> Privacy Policy >> Contact |