A tax lien is a legal claim that the government makes against a person's property to secure payment of unpaid taxes. When a person fails to pay their taxes, the government has the right to place a lien on their property, which gives them priority over other creditors in the event that the property is sold. This means that the proceeds from the sale of the property must be used to pay off the outstanding tax debt before any other debts or obligations are satisfied.
There are a few different types of tax liens that can be placed on a property. The most common type is a federal tax lien, which is placed by the Internal Revenue Service (IRS) when a person owes taxes at the federal level. State and local governments may also place liens on a property for unpaid state or local taxes.
Once a tax lien is placed on a property, it becomes a matter of public record and can have a negative impact on a person's credit score. It can also make it difficult for the property owner to sell or refinance the property.
There are several ways to remove a tax lien from a property. One option is to pay off the outstanding tax debt in full. This will release the lien and clear the property of any liens.
Another option is to enter into a payment plan with the government agency that placed the lien. This could involve paying off the debt over time, with the lien remaining in place until the debt is fully paid. Once the debt is paid, the lien will be released.