I owe a big tax bill to the IRS, as a result of which the feds have slapped a lien on my house. Can I get rid of the lien by successfully filing for Chapter 7 bankruptcy?

Only an experienced tax lawyer can tell you for sure, but the unfortunate answer is no, probably not. The fact is that, if everyone could avoid paying their back taxes by filing for personal bankruptcy, there wouldn't be enough bankruptcy lawyers in the country to handle all the business. The IRS and the federal government are much smarter than that, and, as a result, there are specific provisions in the bankruptcy laws that make it virtually impossible to void your tax debt.

But wait, it gets even worse. Even if you do manage to eliminate your back taxes with a personal bankruptcy filing (your debt has to be at least three years old, you have to have filed your income-tax returns in the past, and you have to demonstrate to the government that you didn't actively commit fraud), that lien on your house probably won't be lifted. After all, your home is still a valuable asset, and the IRS has a vested interest in getting its cut of the proceeds if you succeed in selling it. All the IRS has to do is slap a lien on your home (or other property) before you file for bankruptcy, and that lien will stick no matter if your petition is successful or not.

If your tax troubles are serious enough that the IRS has slapped a lien on your home, you need a more effective solution than filing for personal or business bankruptcy. At Travis W. Watkins, PC, our Oklahoma tax professionals can advise you about your other options, including filing an Offer in Compromise, whereby you can pay off a reduced tax bill in regular installments. Questions? Call us today at 800-721-7054 to find out what we can do for you!