The Internal Revenue Service recently filed a tax lien against Vanessa Williams, who has had broad success in modeling, music, television and Broadway performances. According to a document recorded at the New York City register’s office, the singer-actress owes the government $369,249 for 2011 earnings.
She becomes the most recent in a long list of celebrities who have had trouble with the IRS. This summer, Kordell Stewart, a former quarterback with the Pittsburgh Steelers also had a tax lien filed against his property in Georgia for unpaid back taxes. This post will discuss lien basics and ways to get rid of a tax lien.
An IRS tax lien protects the government’s interest in all your property. This includes your home, a vacation home or investment property, personal property (i.e. expensive heirloom jewelry) and financial assets held in checking, savings or brokerage accounts.
When you do not pay back taxes owed in time, the IRS will send a letter explaining how much you own and then put the balance on the books. The public document called the Notice of Federal Tax Lien alerts creditors that the government has a right to your property.
A tax lien can make it difficult to obtain credit and it attaches to assets you might purchase while the lien is pending. In addition, the tax debt and lien may survive a bankruptcy filing.
Paying the tax debt in full will release the lien within 30 days. In some circumstances, a discharge, subordination or withdrawal may be possible. These options would come into play if you were trying to sell or refinance a property. An experienced tax attorney can describe each in more detail and discuss whether you might qualify.
Source: CNN, “IRS hits Vanessa Williams with big tax lien,” Alan Duke, August 27, 2014.