Updated July 8, 2014
How do I pay off my federal tax lien?
Cash still works in this country. Checks are great as long as they cash. You can use a credit card if you must. Of course most of the rates that the credit card companies would charge you may be less than any interest and penalty charged by the federal government. Let’s also remember that the enforcement actions available to credit card companies pale in comparison to the power and abilities of your average IRS Agent. Credit card companies can’t take your house.
Depending on the severity of the problem, you might consider putting a loan on a piece of property to pay off federal tax liens. Amounts that a mortgage company would charge you will probably be far less that the interest and penalty charges.
But if your tax problem has actually gone to the lien stage, then those options are probably not still available to you. It’s probably time to look at a payment plan or installment agreement. If this is not an option, given cash flow difficulties, then you may be able to reduce the overall tax debt with an Offer in Compromise.
Either way, there are option available to you. Ignoring the problem will not make it go away. It will simply get worse with compounding penalties and interest.
If you are having problems in a Pay Off Federal Tax Lien Situation or have other issues with your accounting in general, we would love to help. I enjoy hearing from my readers, and can be contacted at
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Chris Amundson is the President of Accounting Solutions Ltd., a full service public accounting firm of Certified Public Accountants and Enrolled Agents handling the bookkeeping, accounting, tax preparation, and audit representation needs of Businesses, Estates, Trusts, and Upper Income Individuals.