What Is a Lien?
A lien is defined as the right of the IRS to satisfy its tax bill if your property is sold. A lien will appear on your credit report, and it is a negative for your credit rating.
A lien is bad in the long run, but not painful in the short run.
Liens can be embarrassing, but usually not dangerous. The IRS may place a lien on you if you enter into a payment plan with them, or if you haven’t replied to their letters.
If you own property, the lien will “attach” to your property, meaning that you won’t be able to sell your house or other property without notifying the IRS of the sale. They will want all or part of the proceeds of sale. So obviously a lien is bad in the long run, but not painful in the short run.
What Can I Do In the Event of a Lien?
If a lien is placed on you, you will have thirty days to appeal the lien within the IRS. The reasons that a lien would be overturned within the IRS are very narrow, and one is rarely successful in having a lien removed. The IRS attorneys wrote the law and it favors them.
Often liens are appealed for other reasons, which are equally valid, such as making an offer in compromise or payment arrangement. In this instance, a lien may be an opportunity to negotiate your tax bill with an Appeals Officer in an efficient manner.