How to Pay a Tax Lien

by Jennifer Allen ; Updated July 27, 2017

Items you will need

  • IRS contact
  • Copy of tax lien

When the Internal Revenue Service determines that you are not going to pay taxes you owe, it may decide to file a tax lien against you. Under federal law, a tax lien can be placed against your property to secure the amount of tax debt you owe. Tax liens are recorded in public records and will be reported on your credit report. There are several ways to pay tax liens so your credit is not affected and you get back full control over your property.

Step 1

Pay the lien immediately from money in your savings. With the lien removed, you'll be able to transfer ownership of your property and your credit will benefit.

Step 2

Get your wages garnished. If you need to pay taxes but do not have the money, have your wages garnished until the tax lien is paid. IRS garnishments are limited to 25 percent of your net income each pay period.

Step 3

Let the IRS deduct the amount of your tax lien from your income tax refund if you are expecting one when you file your tax return this year. You must contact the IRS and let it know you wish to have the taxes taken out of your refund.

Step 4

Refinance your property. A tax lien must be paid if you refinance, and lenders can often pay the lien to the IRS directly out of your loan amount.

Step 5

Sell your property. So the new owner can take ownership of the property, the closing agent must pay the tax lien out of the sale proceeds you receive.

About the Author

Jennifer Allen obtained her Bachelor of Arts in economics and a Bachelor of Arts in political science, and has worked in finance since May 2006. She completed her Master of Arts in human resource management in December 2009. Allen has written a variety of articles that are published on various websites.

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