As a lender, do I have the right to foreclose if there is a federal tax lien? This is one of the major questions that get raised from the lender side. Before getting to know about anything, let us have a look at the federal tax lien.
Understanding a federal tax lien
In general, a federal tax lien is a legal claim by the government against a property for unpaid taxes. The lien on the property is registered with the Internal Revenue Service (IRS), even if it is the taxpayer’s homestead and it is this lien that gives them the right to foreclose the real estate property. As soon as it is filed, it becomes a public record and the full amount owed to the IRS is recorded and filed. These details are picked up by the credit reporting bureaus on a regular basis such that the federal tax liens will show up on the homeowner’s credit report. However, this process is executed only if there is a sufficient amount of equity in the property to shell out any superior liens and still be able to recover the IRS debt. A federal tax lien is said to downgrade the owner’s credit score to a great extent, and in quite a few cases this lien must be paid in full.
Dealing with a federal tax lien
A Federal tax lien is a legal claim that crops up by operation of law when the tax is assessed against the taxpayer’s property, and remains owing after demand for payment. Having said that, a Federal tax lien attaches all assets and interests in property owned by the taxpayer at the time it occurs, or obtained by the taxpayer during the following ten years.
Classified under the category of secret lien that is known only to the internal revenue service department and the taxpayer. The Internal Revenue Service is prohibited by law from saying anything about the same to any third party other than the taxpayer, with two exceptions. Either it can bring a court proceeding to foreclose the Federal tax lien or if not the balance is minimal; the IRS will issue a Notice of Federal tax lien against the taxpayer, reports and records it in the register of deeds office in the county of the taxpayer’s residence. The main reason for issuing notice of federal tax lien is to prevent third parties from lending money or purchase property from the taxpayer.
Final points
Dealing with a federal tax lien involves a lot of paperwork and understanding about the federal laws. Coupled with this, there are so many scams involving taxpayer’s information, whether you wanted to know the basic facts or practical details about it or have an insider view about tax lien business, the US Tax Lien Association is said to help. Sean Higgins, the real estate mentor who has been in the business for years, helps you to make a safe investing in tax lien and guides you every step of the way when it comes to tax deed and tax lien certificate. Saen Higgins reviews will help you have a clear picture of everything you wanted to know about tax lien investing and being a part of his seminar means you are going to have a safe investing.
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