The IRS sends Audit Letter 3172 to taxpayers who owe a lot of back taxes to the agency. Generally, by the time this letter is sent, the IRS has attempted to contact the individual a number of times without receiving a response. What does Audit Letter 3172 involve? Is there a way to resolve back taxes? 

What Does Audit Letter 3172 Say?

Audit Letter 3172 serves to notify a taxpayer that the IRS has issued a federal tax lien on his or her property. Along with the statement of the tax lien, the notice will also state the relevant tax period for which the lien was imposed and the total amount that is owed to the agency.

In most cases, the audit letter includes a form that explains how to appeal the tax lien, if you believe that the IRS has made an error in calculating your tax liability. While it may be tempting to proceed with an appeal on your own, particularly if you believe that the IRS is wrong, it is crucial to seek assistance from a qualified tax attorney or Enrolled Agent first.

What is a Tax Lien?

A federal tax lien is a monetary claim that the IRS places on your property. In short, what the lien does is give the IRS the first claim to any profits from a potential sale of the property. For example, if you own a home and the IRS places a tax lien on the property, the agency will have the right to seize the profits to collect your back tax debt.

The IRS only resorts to imposing a tax lien when a taxpayer is seriously delinquent on his or her tax debt and has made no efforts to pay it. Those who are willing to work with the IRS by establishing a tax payment plan or making regular payments typically do not have to worry about facing the prospect of a tax lien.

Can You Get a Tax Lien Removed?

The only surefire way to remove a tax lien is to settle your account with the IRS. Before imposing a tax lien, the agency always gives at least a 30-day notice. If you haven't contacted the IRS yet, that is the time to take action to bring your account into compliance. You may not even be required to remit the full balance due at once. In some cases, simply establishing an installment plan and sending an initial payment may be enough to hold off the tax lien process.

If you've received Audit Letter 3172 in the mail, don't feel that you are out of options. Contacting the IRS and attempting to clear your account may be the first step toward settling your back tax debt. Be sure to consult an experienced income tax professional if you need further audit assistance.