The Rev. Al Sharpton lately has come into prominence as an imposing figure as men in power lined up to exclaim their admiration for him. Mayor Bill de Blasio and Gov. Andrew M. Cuomo hailed him as a civil rights icon. President Obama sent an aide to read a message commending Mr. Sharpton’s “dedication to the righteous cause of perfecting our union”.

But despite this rise in power Mr. Sharpton has apparently sidestepped the inevitable obligations to pay taxes as public records show more than $4.5 million in current state and federal tax liens against him and his for-profit businesses.

During a news conference at the headquarters of his National Action Network in Harlem, in November 2014, Mr. Sharpton sought to refute the assertion by an article in the New York Times that there were $4.5 million in state and federal tax liens outstanding against him and the for-profit businesses he controls. He said that the liens had been paid down, although he declined to say by how much, and that he was “current on all taxes” he was obligated to pay under settlement agreements with tax authorities.

“We’re talking about old taxes,” he said, adding: “We’re not talking about anything new. So all of this, as if I’m not paying taxes while I’m doing whatever I’m doing, it reads all right, but it just is not true.”

State and federal tax records show, however, that the liens against Mr. Sharpton and his businesses remain active, meaning they have not been completely paid off. But that could change soon, thanks to the more than $1 million raised at his birthday party last month.

When would the IRS or State Tax Agency file a Tax Lien?

The IRS or a State Tax Agency will file a lien when the agency feels there is a chance that collection is in peril. It does not just grab your assets. Filing of a tax lien is normally dictated by the dollar amount. For IRS under the IRS’s Fresh Start program, the lien threshold was increased from $5,000 to $10,000.

The Notice of Federal or State Tax Lien is filed in the public records office of each county where you own property and thus attaches to any property you own. If you sell the property, proceeds will be used to satisfy the lien. Any person or company pulling a credit report on you will see the tax lien. This will damage your borrowing ability, making it difficult to refinance your home, get an auto loan, credit card, or business loan. Also, if you are looking to refinance your loan, the lien would have to be satisfied at closing in order for the lender in the new loan to retain a senior creditor’s position.

Alternatively, a new lender should be willing to make the new loan where the IRS and State Tax Agency agrees to subordinate its lien. A taxpayer can request that the IRS and State Tax Agency subordinate their liens to the new lender. In the process, even though the tax lien would be older than the new loan, the IRS and State Tax Agency agree to stand behind the new lender should the loan be defaulted and the new lender now seeks to foreclose on the property.

Federal Tax Liens Do not Necessarily Have To Remain In Place While You Are Under A Payment Plan.

It is true that certain taxpayers who enter into payment plans with the IRS can get tax liens withdrawn even before the liability is paid in full. You must enter into a Direct Debit installment agreement and also meet the following to request that the Federal Tax Lien be withdrawn:

1. The current amount you owe must be $50,000 or less;

2. If you owe more than $50,000, you may pay down the balance to $50,000prior to requesting the lien withdrawal to be eligible;

3. Your Direct Debit Installment Agreement must full pay the amount you owe within 60 months or before the Collection Statute expires, whichever is earlier;

4. You must be in full compliance with other filing and payment requirements;

5. You must have made three consecutive direct debit payments;

6. You cannot have previously received a lien withdrawal for the same taxes unless the withdrawal was for an improper filing of the lien; and

7. You cannot have defaulted on your current, or any previous, direct debit installment agreement.

An existing installment agreement not structured as a Direct Debit Installment Agreement can be converted so that you can now qualify for this relief for lien withdrawal. Bear in mind that if you default on your Direct Debit Installment Agreement after the lien is withdrawn, a new notice of lien may be filed and collection efforts may resume.

Don’t Take The Chance And Lose Everything You Have Worked For.

Protect yourself. If you are in danger of wage garnishments or bank levies or having a tax lien placed against your property, stand up to the IRS and your State Tax Agency by getting representation. Tax problems are usually a serious matter and must be handled appropriately so it’s important to that you’ve hired the best lawyer for your particular situation.

Original Post By:  Jeffrey Kahn