The Tax Man Lienith

After ten years the Internal Revenue Service issued 475% more liens last year than it did in 1999.

A recent CNNMoney story quoted national taxpayer advocate Nina Olson saying, “Taxpayers are being greatly harmed for very little benefit to the government.” In her annual report to Congress, Ms Olson says the IRS must do more to assess whether the benefits of a tax lien outweigh its harm to the taxpayer.

Long arm of the lien

What kind of harm is she referring to? First, a lien can stay on a credit report anywhere from 10 years to 15 years or more, not to mention the damage it does to your credit score. This has a domino effect on a person’s ability to get a job or a promotion if the employer uses credit scoring as a screening tool.

We always tell our self-employed and small business clients that the easiest man to borrow from, and the hardest to repay, is the Tax Man.  Good tax advice, from either a CPA or an attorney with bankruptcy experience, can be worth its weight in gold.

Most laypeople do not know that certain tax obligations ARE dischargeable in a bankruptcy. When you know your options you make better choices.