What is a Tax Lien? Why the IRS Uses Liens
A tax lien is imposed by the IRS as a way of collecting payment of taxes. A lien can be imposed for a number of reasons including not paying income taxes, or taxes owed on real estate, etc. Simply put, a federal lien is a way for delinquent taxes to be collected when the taxpayer is not cooperating. It is much better to cooperate with the entity that you owe taxes to than it is to deal with a tax lien. Tax liens on real estate are often times confusing. This is because the lien stays with the home instead of the person who did not pay the taxes. In theory, you could buy a home with a lien against it and then be responsible for paying the taxes . This is not something that you should want to do, but it does happen from time to time. Those buying a home need to be very careful when checking out the property. If there is a lien on the home you want to buy you need to think long and hard about what this means. A federal tax lien is imposed by the IRS and is used to...