Everything You Need to Know About a 941 Tax Lien

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As an employer, you are accustomed to dealing with tax concerns. Many of these involve IRS Form 941, which is also known as the Employer’s Quarterly Federal Tax Return. Filed four times each year, this form calls for details on the number of people employed by your business, total wages paid to these workers, and the amount withheld for tax purposes.

If you’re diligent about filing Form 941 on time, you’re unlikely to run into many problems from the IRS. Life happens, however, and sometimes, even responsible employers neglect this document. Unfortunately, the repercussions sometimes go beyond expected fines to include devastating liens on property.

What Does it Take for the IRS to Resort to a Lien?

Typically, those who fail to file Form 941 on time suffer monetary penalties, which can add up quickly as time goes by. Additional penalties may be assessed for late payments or underpayment.

If you continue to neglect to file Form 941 or make necessary payments after being assessed penalties, you may receive a Notice and Demand for Payment from the IRS. Should you fail to respond to this, the next step will likely involve a public document known as a Notice of Federal Tax Lien. This will let creditors know that the government holds legal rights to your business property.

How Can a 941 Lien Be Removed?

Depending on the situation, it may be possible to either prevent 941 liens or quickly resolve them through the appeals process. Lien notices can be followed by Collection Due Process requests. Circumstances surrounding appeals vary among employers, but could include invalid IRS processes, efforts to file for bankruptcy, or expirations on the statute of limitations for collection.

In some cases, IRS liens can be withdrawn. This often occurs when liens are filed in error or without providing proper notice. In the eyes of creditors, a withdrawal makes it appear as if the lien never existed.

Whether you’ve been assessed a lien or are looking to avoid suffering one in the future, the Highland Tax Group can help. Reach out today to learn more about our tax resolution services.