We have noted in a number of our posts, the power the IRS has to collect taxes; especially those that are past due. The IRS may place liens on property, and even exercise levies on homes, cars and even financial accounts. After all, the federal government believes that there are billions in uncollected tax debt that can be recovered; hence the use of private collectors on some accounts.
As we have noted in our prior posts, no one actually wants to receive a tax lien. Most would agree that IRS liens are the bane of one’s existence. However, if a tax lien is initiated against a taxpayer, the federal government has a legal obligation to send notice of the lien to the taxpayer’s last known address. The government is also charged to use care in ensuring that a taxpayer’s address information properly updated.
For most, the prospect of having any interaction with the Internal Revenue Service beyond filing a tax return and either paying in or receiving a refund is frightening. Being slapped with a tax lien is tantamount to the approach of the end of the world. Of course these two things are not on the same plane and in some cases a tax may be the result of a simple oversight or miscommunication and be easily addressed. Late last month Oscar winner Robert DeNiro found himself in this situation.
The average resident of California has little to no understanding of what a federal tax lien is or how it works. Simply put, it is what could happen when you fail to pay your federal income taxes. It is a claim against your property that will not arrive until you first receive a Notice and Demand for Payment which indicates how much you owe.
Tax problems are not limited to those who are struggling financially. This is illustrated by the tax problems the actress and singer Vanessa William, is facing. Late last month it was announced that the Internal Revenue Service filed a federal tax lien against her. It is seeking a total of $369,249.