Tax liens are placed on an individual or business by the Internal Revenue Service (IRS) when past-due taxes are owed but have not been paid. Tax liens can have a strong negative effect on the purchase or sale of the associated real estate. In order to facilitate the transaction, the IRS will sometimes offer lien subordination. The IRS places a lien on the property, until all taxes, fees, and/or penalties have been paid. Tax liens can be settled in a few different ways. The most obvious is to pay the bill.

Tax liens can also be removed when some kind of repayment agreement has been reached between the IRS and the debtor. Usually, the IRS will go into a repayment agreement where installments of the debt are paid each month until the full amount has been repaid. This is usually how income tax payments are handled, but they may also include some penalty fees. T ax liens advisor or lawyer may need to be employed to determine and settle such matters.