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Avoiding a tax lien in Georgia

Comedian Chris Tucker recently settled a tax case with the IRS for more than $14 million. A representative for Tucker said that it was due to poor management and business practices. While mistakes may be made by anyone, a taxpayer generally has several chances to rectify those mistakes before the IRS takes serious action.

First, the IRS must send a notice assessing the liability. Then, it must send a taxpayer a demand for payment and give 10 days for the taxpayer to respond. If the tax has not been paid, the IRS can then put a lien on all property that the taxpayer obtained both before and after the lien was established. Although a lien could be filed against a taxpayer who does not owe the government money, this is rarely the case.

To avoid a tax lien being placed on property, a taxpayer may wish to work closely with the IRS and respond promptly to all correspondence. If a lien is granted, it will apply for 10 years or until the government agrees to release it. It is generally a good idea to pay the balance owed or send proof that the balance is being requested in error.

If the IRS sends a notice that taxes may be owed, it is advisable to review it carefully with the assistance and guidance of a tax attorney. Such an attorney can help organize documents or prepare a defense that would reduce or eliminate the proposed tax balance. It also may be possible to negotiate with the IRS directly to come to a settlement agreement on amounts that are allegedly owed.

Source: Forbes, "Serious Lessons From Comedian Chris Tucker's $14 Million IRS Bill", Robert W. Wood, September 02, 2014

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