Until recently, the IRS could impose a tax lien on an individual's property, assets, or bank accounts for a debt as small as $5,000. That all changed in 2011, though, when the agency announced that, because of inflationary pressures and the struggling economy, it had increased its limit to $10,000. If you owe less than this amount, the IRS will be willing to work out an overdue tax installment-payment plan with your tax attorney, but it's not as if they're going to forgive the debt: you'll still have to pay your taxes, or risk significant penalties or even jail time.
At the same time as it increased its threshold for tax liens, the IRS instituted another policy that works to the benefit of taxpayers. If you owe more than $10,000 in back taxes, and wind up with a lien on your house, you can officially ask the IRS to withdraw the lien once you've paid your bill in full. What this means is that the IRS will erase any mention of the lien from its public records, and the lien will no longer affect your credit score.
A lien is a red flag to credit agencies, which will reduce your score by hundreds of points once they learn of the tax debt you owe to the IRS. The trick here is that you have to actively file for an IRS withdrawal; if you just pay your debt and don't pursue the matter further, the lien will stay on your credit reports for as long as seven years after it's paid in full.
No matter how much you owe to the IRS, a federal tax lien is not to be taken lightly. If you're an Oklahoma resident who feels you're in lien territory, call the experienced Oklahoma City tax lawyers of Travis W. Watkins, PC for a free consultation! Reach us today toll-free at 800-721-7054.