Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Need to Resolve a Federal Tax Lien?

Author: Scarinci Hollenbeck, LLC

Date: February 22, 2016

Key Contacts

Back

Do you need to resolve a Federal tax lien?

5 Common Tax-Filing Mistakes You Should Avoid
Photo courtesy of Stocksnap.io

A Federal tax lien is not only a short-term financial burden, but the long-term effects are potentially devastating to consumer credit, employment and purchasing power, tax attorney Stephen J. Dunn wrote in a recent Forbes article. The IRS maintains the lien for 10 years before a tax levy is placed on consumer assets, said Dunn, a civil tax and asset forfeiture litigation expert. 

The importance of resolution

A tax lien is attached to all personal and business assets, which results in a negative credit rating. In turn, when this appears on consumer credit reports, a negative rating can adversely impact consumer ability to secure credit and future assets.

“The three major credit reporting agencies include notices of Federal tax liens (NFLTs) in the taxpayers’ credit reports, affecting the taxpayer’s credit standing,” noted Dunn. “The Internal Revenue Service records NFTLs as a matter of practice, to prevent third parties who purchase property from the taxpayer, or lend money to the taxpayer taking a security interest in the taxpayer’s property, from acquiring an interest in the taxpayer’s property superior to the Federal tax lien.”

The Federal tax lien also accrues penalties and interest in addition to the tax amount owed, which can place consumers in crippling debt.

The effects of Federal tax liens

A cautionary example of the impact a tax lien can have on a consumer occurred with lobbyist Steven Pigeon, who has $244,000 in tax delinquencies, according to a recent report in Buffalo News. In addition to two tax liens placed on his assets for $126,000 and $118,000, his consulting firm has experienced numerous contractual cancelations that have hindered his ability to pay the tax delinquency.

“As a result, Pigeon said two weeks ago that he was bolstering his new lobbying activities through a firm he and longtime associate Gary R. Parenti formed last year,” the news source noted. “Chief among his new lobbying clients was the Seneca Nation of Indians, which announced Tuesday it was canceling its $180,000 contract with the Pigeon firm – PAPI Consulting LLC.”

However, the IRS has negotiated a payment plan with Pigeon as part of their ongoing efforts to increase the threshold amount for tax liens filed. This increased dollar threshold adjusts to inflationary changes, which enables high net worth individuals to have tax liens automatically filed at a fixed amount.

Federal tax lien resolution options

Consumers have several options to resolve Federal tax lien status, although withdrawal is chief among those alternatives. 

“The IRS implemented something called the ‘Fresh Start’ initiative, which is a series of procedures and policy changes directed toward taxpayers facing collection from the IRS,” noted the Fox Business website. “One of the changes includes a policy that allows certain taxpayers to request that their tax liens be withdrawn, even before the underlying tax debt has been paid.” 

Ultimately, with the federal tax lien withdrawal option, resolution is a readily available alternative for consumers.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business post image

The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business

Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]

Author: Dan Brecher

Link to post with title - "The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business"
Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies post image

Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies

The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]

Author: Brian D. Spector

Link to post with title - "Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies"
How Understanding Bankruptcy Trends Can Benefit Your Business post image

How Understanding Bankruptcy Trends Can Benefit Your Business

The bankruptcy legal landscape presents both challenges and opportunities for businesses navigating financial distress. Understanding current bankruptcy trends can help businesses make more informed and strategic decisions. Corporate Bankruptcy Filings Trending Upwards Bankruptcy filings continued to trend upwards in 2024. According to statistics released by the Administrative Office of the U.S. Courts, personal and business […]

Author: Brian D. Spector

Link to post with title - "How Understanding Bankruptcy Trends Can Benefit Your Business"
SEC Takes Actions Against Issuers for Failure to File Form D post image

SEC Takes Actions Against Issuers for Failure to File Form D

In December, the U.S. Securities and Exchange Commission (SEC) announced charges against two privately held companies for failing to file a Form D notice, which is generally utilized for exempt securities offerings. Here, the SEC’s enforcement sends a strong message: compliance with regulatory requirements is not optional and failure to comply can have significant consequences. […]

Author: Kenneth C. Oh

Link to post with title - "SEC Takes Actions Against Issuers for Failure to File Form D"
Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda post image

Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda

On February 14, 2025, the Office of General Counsel (OGC) of the National Labor Relations Board (NLRB) under Acting General Counsel William B. Cowen issued Memorandum 25-05, “New Process for More Efficient, Effective, Accessible and Transparent Case handling.” The Memorandum rescinds nearly all of the Memoranda issued by his direct predecessor, Jennifer Abruzzo, setting the […]

Author: Matthew F. Mimnaugh

Link to post with title - "Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda"
What Are FIRPTA Withholding Requirements? post image

What Are FIRPTA Withholding Requirements?

If you purchase real property from a foreign person or entity, you may be required to withhold taxes from your payment to the seller under the Foreign Investment in Real Property Tax Act (FIRPTA). The federal tax law is designed to ensure that foreign sellers pay any applicable capital gains tax on profits realized from […]

Author: Jesse M. Dimitro

Link to post with title - "What Are FIRPTA Withholding Requirements?"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!

Please select a category(s) below: