Tax liens are one of those things that can show up unexpectedly. You may often read of celebrities, entertainers, and other highly paid individuals have been hit with a state or federal tax lien. You may believe because they make a great deal of money, they should know better. Or at least their accountant or tax lawyer should know better.
A tax lien is imposed on an individual when they fail to pay a tax obligation. If you receive a notice of Federal tax lien (NFTL) from the Internal Revenue Service (IRS), you need to take action quickly, as failure to do so can bring damaging consequence.
A report last month of a Wake Forest University professor and television commentator on MSNBC who was received a NFTL for a $70,000 tax debt. She is a political science and international affairs professor. She has taught at top-tier schools, including the University of Chicago, Tulane, and Princeton, so she clearly understand the basic concepts of taxation.
However, unlike many people who earn a standard salary, where all of their taxes are paid via payroll withholdings, professions where earnings are substantial, but irregular, can generate potential tax delinquencies.
Similarly, small business owners may have cash flow issues that compromise their ability to deal with their taxes in a timely fashion. Whatever the cause, it is essential that you act immediately when you receive a tax lien notice.
Once in place, the IRS or Michigan Department of Treasury will have lien or real or personal property, and you will be forced to pay the lien before you could sell the property. Additionally, the IRS can levy your bank accounts and wages to pay the lien.
Accountingtoday.com, "MSNBC Host Melissa Harris-Perry Facing IRS Tax Lien," Michael Cohn, April17, 2015