It is said that two things are certain and that is death and taxes. Taxes should be collected from individuals and businesses which earn any sought of income whether it’s through buying and selling of goods and services or large assets such as houses and cars. Failure to pay taxes becomes an IRS problem and the agency can impose penalties and interest rates to the owed balance which becomes difficult to pay. If a tax payer is having difficulty paying taxes, then they can write to the Internal Revenue Service explaining their situation and their intent to pay when they are financially stable. Failure to do this will result in an individual getting slapped with a tax lien which can damage one’s credit history making it impossible to get new credit.
The effects of a tax lien can be financially crippling. The lien lasts for ten years and if the tax payer sells any property, the IRS is the first to be paid. It is frustrating and the individual has to borrow money and buy assets using other people’s accounts. A tax lien is very serious and even after being paid off, it can still remain on one’s credit report and make it difficult to buy a house, get loans and even a job.
If Uncle Sam slaps one with a tax lien, it’s best for the individual to file a tax return for the back taxes outstanding and then pay off the amount owed or set up payment arrangements.