In a recent announcement, the IRS has announced that it will reduce the number of liens that it would place on property which are owned by people who are unable to pay their taxes. The IRS will also make it easier for taxpayers to get their existing liens withdrawn.
What is a tax lien?
A tax lien can be defined as a lien which is placed by law on a property in order to obtain the payment of delinquent taxes. A federal tax lien helps the IRS to claim a taxpayer's property for the amount of an unpaid tax debt. A tax lien will reduce the taxpayer's credit score significantly. It will be difficult for the person to sell the home unless the lien is paid off.
Why has the IRS become lenient on liens?
Since the start of the recession, tax liens have become very common. It has been increased by 60%. The IRS has decided to go lenient as it makes it quite difficult for any person to find a job, or get a mortgage or buy insurance if they have a tax lien on their property.
What changes have been introduced by IRS?
The changes that have been introduced regarding the lien filing practices include the following:
- Easy to obtain lien withdrawals after paying the delinquent taxes.
- Increase the dollar threshold when liens are issued leading to fewer tax liens.
- Easy access to Installment Agreements for small businesses.
- Remove the liens when the taxpayer enters into a Direct Debit Installment Agreement.
- Expand the streamlined "Offer in Compromise" program to include more taxpayers.
This is an important step in the right direction taken by the IRS. Let's hope that these steps finally have a positive impact on the economy.