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Tax Lien

A tax lien is the federal government’s legal claim against an individual’s property when that individual fails to pay taxes. It could be income or property tax. The tax lien is a claim against all of an individual’s property including real estate, personal property, and financial assets. When an individual neglects or refuses to pay the tax debt, the Internal Revenue Service (IRS) files a public Notice of Federal Tax Lien. This alerts potential creditors and lenders that the government has a legal right to an individual’s property. In a bankruptcy, tax liens are higher priorities than most consumer debt.