What is a Tax Lien?

• A federal tax lien is a lien imposed by the government on property to ensure the payment of taxes. It may be imposed for delinquent taxes owed. Tax liens on real estate mandate that a property owner is responsible for payment of taxes even if the obligation was incurred by the prior owner.
  
  

What is the Tax Lien Process?

• The process begins with a lien being filed subsequent to a taxpayer not paying taxes to the Internal Revenue Service. The taxpayer is then notified of the filing either in person or by mail. The notice includes the amount owed and the necessary process to release the lien. If in the process of 10 years the taxes are not paid, the government will file suit against the taxpayer. The Internal Revenue Service has the right to seize the property owned by the taxpayer to satisfy the debt. Property includes bank accounts, income and life insurance policies.
  
  

Refiling Notice of the Tax Lien

• According to Section 6323(g)(2), a provision was made in the act, which allows for refiling of notices of liens. This preserves the priority of the lien and the enforcement period beyond the normal limitation period. If the refiling is accurate and well-timed, it relates back to the original filing.
  
  

Provisions of the Act

• In addition to the provision stating that the federal government must provide written authorization to divest a subordinate tax lien under a power of a sale, other less important provisions exist. For example, when defining "personal holding company income," the term does not include rental income provided for the leasing of property manufactured by the firm.