If you owe a balance to a taxing authority, whether it is the IRS, the Colorado Department of Revenue, or any other state, county or city government, you may have a tax lien filed against you or your business.
A tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest and can attach to nearly all your property, including property you acquired after the tax lien was filed.
When the IRS files a tax lien, it prepares what is called a “Notice of Federal Tax Lien” or NFTL. A NFTL is a public record that can have a powerful impact on your finances and ability to operate your business or complete other financial transactions.
The simplest route to get rid of a tax lien is paying the tax debt in full. The IRS will “release” your NTFL within 30 days after you have paid your federal tax debt.
The Colorado Department of Revenue will not always release the lien automatically after you pay the debt. Often, you have to obtain confirmation from the state that debt is satisfied, and then you are responsible to file it where it needs to be filed (for example, your county Clerk & Recorder office or state court) in order to remove the lien from public records.
Sometimes, when conditions are in the best interest of both you and the government, other options for reducing the impact of a lien exist.
They are not the same thing – a lien is not a levy!
A lien secures the government’s interest in your property when you don’t pay your tax debt. A levy actually takes the property to pay the tax debt. If you don’t pay or make arrangements to settle your tax debt, a taxing authority has the legal ability to levy, seize and sell any type of real or personal property that you own or have an interest in.
At the Law Offices of Daniel T. Goodwin, our tax resolution team has handled a wide range of cases and issues involving tax liens. Do not hesitate to contact us if you have a question about a tax lien or need help resolving your lien problem.