When the IRS files a Notice of Federal Tax Lien against you, it attaches to your home, your business assets, and your future income, becomes a matter of public record, and can damage your credit and block refinancing before you have had a chance to respond.
At Sheppard Law Offices in Columbus, Ohio, we represent individuals and businesses facing federal and Ohio state tax liens, identifying every available resolution pathway and taking action to protect what you own before collection efforts escalate into a levy or seizure. Contact us today to schedule a free consultation.
A tax lien is a legal claim the government files against your property when you fail to pay a tax debt after proper notice and demand. The lien does not require a court order. It attaches automatically once the IRS, or a state tax authority, assesses a tax liability, sends you a bill, and you fail to pay in full or make alternative arrangements.
The IRS follows a specific sequence before a lien becomes a matter of public record. Understanding that sequence matters because each step gives you an opportunity to intervene.
The IRS generally has ten years from the date of assessment to collect the tax debt through enforcement of the lien. That collection statute can be extended or tolled in certain circumstances, including pending offers in compromise, bankruptcy filings, and certain collection due process proceedings.
Ohio taxpayers can also face liens filed by the Ohio Department of Taxation for unpaid state income taxes, employer withholding taxes, or sales and use taxes. The Ohio Attorney General's office handles collections on delinquent state tax accounts and has the authority to certify those debts for enforcement through its Collections Enforcement Section. Ohio state tax liens operate under state law, are filed separately from federal tax liens, can appear on your credit report, and can cloud the title to your real property.
A tax debt that began with an audit, an unfiled return, or a business withholding failure can trigger both a federal and an Ohio state lien faster than most people expect. When both are present, each operates on its own timeline with its own resolution pathways, and effective representation means addressing them in coordination rather than separately.
A lien and a levy are not the same thing, and understanding the difference is essential if you are trying to protect your assets.
A tax lien is a legal claim. It secures the government's interest in your property but does not immediately take it. Think of it as the government placing a marker on everything you own, notifying the world that the IRS has a priority claim if and when that property is sold or refinanced.
A tax levy is the government's enforcement mechanism. A levy is the actual seizure of your property or income to satisfy a tax debt. The IRS can levy your wages, bank accounts, retirement accounts, and physical property, including real estate, vehicles, and business assets.
A tax lien arises automatically and requires no court order. Before the IRS can proceed to a levy, it must issue a Final Notice of Intent to Levy and a Notice of Your Right to a Hearing, giving you 30 days to respond. That window is your last opportunity to intervene before the agency begins seizing property, and once an employer or bank receives a levy notice, it is legally obligated to comply.
When you retain Sheppard Law Offices, we do not hand you a generic checklist. We begin by analyzing exactly where you stand, and we build a strategy around your specific financial circumstances, the nature of the tax debt, and the options that are actually available to you.
"Every tax lien case I see comes in with a different set of facts. The question is never just 'how do we remove the lien?' It is 'what is the fastest, most cost-effective path to protecting this client's property and resolving the underlying debt?' Those are not always the same answer." — Kenneth L. Sheppard, Jr., Esq.
Our representation in tax lien cases includes:
The IRS recognizes several distinct mechanisms for removing or reducing the impact of a federal tax lien. The right approach depends on your financial situation, your goals, and the specific property at stake.
The most straightforward path to lien removal is full payment of the underlying tax liability, including applicable penalties and interest. Once the IRS receives full payment, it is required to release the lien within 30 days. The release is filed with the same county recorder's office where the original lien was recorded.
A discharge removes the federal tax lien from a specific piece of property without releasing the lien as a whole. This is commonly used when a taxpayer is selling a specific property and needs the title cleared so the transaction can proceed. Eligibility depends on the value of the property relative to the outstanding lien and the government's interest in the remaining assets. The governing guidance is IRS Publication 783.
Subordination does not remove the lien but allows another creditor to move ahead of the IRS in priority. This is most commonly used when a taxpayer needs to refinance a mortgage or obtain a new loan, and the lender will not proceed with the IRS in a superior lien position. A successful subordination can make financing possible even while a lien remains active. See IRS Publication 784 for the application process.
A Request Lien Withdrawal removes the Notice of Federal Tax Lien from public record entirely. Unlike a release, which confirms that the debt has been satisfied, a withdrawal is treated as though the public notice was never filed. Withdrawal is available under limited circumstances, including when the lien was filed in error, when the taxpayer is in compliance with a direct debit installment agreement, or when withdrawal serves the best interests of both the taxpayer and the government as determined under the IRS Fresh Start Initiative.
Removing or modifying the lien is only part of the solution. The lien exists because of a tax liability, and that liability must be addressed. The following resolution pathways are available depending on your financial circumstances, the amount owed, and the nature of the debt.
An installment agreement allows you to pay your tax liability in monthly payments over time rather than in a lump sum. The IRS offers several types, including streamlined agreements for balances under certain thresholds and non-streamlined agreements for larger or more complex debts. While an installment agreement does not automatically remove a lien, compliance with a direct debit installment agreement can support a withdrawal request in certain cases.
The IRS can abate, or reduce, civil penalties under certain circumstances. First-time penalty abatement is available to taxpayers with a clean compliance history who have not previously requested abatement. Reasonable cause abatement applies when you can demonstrate that failure to file or pay resulted from circumstances beyond your control. Interest generally follows the underlying tax and is more difficult to reduce, though it can be addressed in some abatement situations.
An Offer in Compromise allows an eligible taxpayer to settle a federal tax liability for less than the full amount owed. The IRS evaluates offers based on the taxpayer's reasonable collection potential, a calculation that accounts for income, assets, and allowable living expenses. Successful OIC applications require detailed financial documentation and a well-constructed submission. Acceptance is not guaranteed, but an accepted offer can significantly reduce total liability and, once its terms are satisfied, result in lien release.
In some cases, federal bankruptcy law offers a path to discharging or restructuring tax debts. Not all tax debts are dischargeable in bankruptcy, and the rules governing which taxes qualify are complex. Income taxes that meet specific age and filing requirements may be dischargeable in a Chapter 7 case. Chapter 13 can provide a structured payment plan that addresses tax debt alongside other obligations. When bankruptcy is a viable option, we coordinate directly with bankruptcy counsel to ensure the lien and the underlying liability are addressed together.
If you are owed a federal or state tax refund, the IRS or the Ohio Department of Taxation will apply that refund against any outstanding tax liability before issuing the remainder to you. Understanding how refund offset works and planning accordingly is part of a comprehensive tax debt strategy.
Sheppard Law Offices serves Columbus-area individuals and businesses across a range of tax and financial legal matters. Tax lien representation requires more than general legal knowledge. It requires familiarity with IRS administrative procedures, Ohio Department of Taxation collection practices, and the practical realities of negotiating with federal and state collection agencies.
"Taxpayers often come to us after they have already tried to handle things on their own. By the time a lien has been filed, the situation is already serious. What I tell every client is this: the sooner we get involved, the more options we have. Waiting costs you pathways." — Kenneth L. Sheppard, Jr., Esq.
When you work with Sheppard Law Offices, you receive:
The more information you bring to your initial meeting, the faster we can assess your situation and identify your available options. We recommend gathering the following before your appointment.
You do not need to have all of these documents to schedule your free consultation. We can help you identify what is missing and request records directly from the IRS or Ohio tax authorities on your behalf.
Tax liens rarely improve on their own. The IRS collection process is designed to escalate, and each step that passes without action reduces your available options. We encourage you to contact Sheppard Law Offices if any of the following apply to your situation.
The attorney at Sheppard Law Offices serve clients throughout the Columbus area from our offices in Columbus, Newark, and Mount Vernon, Ohio. Virtual consultations are available. Contact us today to schedule your free consultation and take the first step toward protecting your property and resolving your tax debt.
When the IRS files a Notice of Federal Tax Lien, it becomes a public record. The three major credit bureaus, Equifax, Experian, and TransUnion, may include the lien on your credit report. A tax lien can reduce your credit score, make it more difficult to obtain new credit or loans, and complicate refinancing efforts. Once the lien is released or withdrawn, you can request that the credit bureaus update their records, though that process may take additional time.
A federal tax lien generally remains in effect for ten years from the date the tax was assessed. However, the IRS can extend the lien's life by filing a refile notice before the statutory period expires. Events such as bankruptcy filings, pending collection due process hearings, and approved installment agreements can also toll or extend the collection period. Waiting out a lien is rarely viable in practice because the IRS has several tools to preserve its collection window.
If the IRS failed to follow required procedures before filing a lien, you may have grounds to challenge it through the Collection Due Process hearing process. If a lien was filed in error because the underlying tax was assessed incorrectly, options include audit reconsideration, an amended return, or an administrative appeal. These challenges require prompt action and documentation. An attorney can review the procedural record and advise you on whether a challenge is viable.
Yes. A federal tax lien attaches to all property and rights to property belonging to the taxpayer. For a sole proprietorship, that includes all business assets, accounts receivable, and equipment. For entities such as corporations or LLCs, the lien attaches to the individual taxpayer's ownership interest in the entity rather than directly to the business itself, though the practical impact on operations can be significant. If the tax debt belongs to the business entity rather than an individual owner, a separate lien and collection analysis applies.
Yes. Under IRC Section 7345, the IRS is authorized to certify seriously delinquent tax debts to the U.S. Department of State. A seriously delinquent tax debt is generally defined as an individual liability exceeding the statutory threshold (adjusted annually for inflation) for which a lien has been filed and a levy notice issued. Once certified, the State Department can deny a new passport application or revoke an existing one. Resolving the underlying liability, entering into an installment agreement, or obtaining an accepted Offer in Compromise can reverse the certification. If you have received IRS Notice CP508C, contact a tax attorney immediately.
If you have any tax questions about Tax Lien issues you may come across, please don’t hesitate to Contact the Columbus tax attorneys at Sheppard Law Offices to discuss your particular situation. For your convenience we have tax law offices in Columbus, Newark, and Mount Vernon, Ohio. Call today to schedule your free consultation at (866)770-4918.
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