Many taxpayers who are required to pay additional taxes each year, may not have the ability to pay the taxes in full. Often, taxpayers do not try to settle the debt, and the IRS is forced to file a tax lien. A tax lien is placed on your property to secure the government's tax liability that you owe them. While tax liens can effect your credit, it is possible to borrow money if you have a tax lien.
Instructions
Borrowing Money with Tax Lien
1. Find a lender. You may already conduct business with a financial institution with which you are familiar. If this will be your first loan or you are seeking a new lender, you may choose to search your telephone directory or the Internet to find a financial institution.
2. Apply for a loan. You will need to call or visit the financial institution and apply for a loan. Application forms may be lengthy and include personal information, as well as address and employment histories.
3. Check the status of your loan. Your lender may contact you by phone or mail regarding the status of your loan. If not, you will need to check back with the financial center to see whether or not the loan was approved.
4. Provide the financial center with a Notice of Federal Tax Lien Release. If the tax lien is still showing on your credit report, the financial center may need proof, if the debt has been paid, so it improves your chances of securing the loan.
5. Have a tax lien payment withdrawn from loan proceeds. If you are using assets, such as your residence or other real estate property, you will need to pay the IRS lien so that you can borrow the money. If you do not have the money to pay the IRS lien, you may have the lender deduct the tax lien amount from the loan proceeds that are paid directly to you. By securing the loan with real property, since the tax lien will be released, it will better your chances of getting approved for the loan.
