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Category: Tax
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Experience:  over 40 years experience in tax matters
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I live in Kansas, I have a tax lien for $16,000 from 2006,

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I live in Kansas, I have a tax lien for $16,000 from 2006, I just sold my business for just over 50,000. My attorney said he would require 5,000 for a retainer. Is that about right for my situation?

Lev :

Hi and welcome to our site!

The federal tax lien arises when any "person" liable to pay any federal tax fails to pay the tax after a demand by the Government for payment. The federal tax lien continues until the liability for the amount assessed is satisfied or becomes unenforceable by reason of lapse of time, i.e., passing of the collection statute expiration date (CSED). IRC § 6322. Generally, after assessment, the Service has ten years to collect the tax liability.


After the federal tax lien attaches to property, it remains on that property until the lien has expired, is released, or the property has been discharged from the lien. The transfer of property subsequent to attachment does not affect the lien. United States v. Bess, 357 U.S. 51, 57 (1958). If property is sold by the taxpayer, the lien attaches to whatever is substituted for it, as it reaches all of the taxpayer’s property and rights to property.
Phelps v. United States, 421 U.S. 330, 334-35 (1975) (lien attached to the cash proceeds of a sale).


Lev :

For details about collecting procedure - see here -
So far - your attorney is correct - the tax lien must be satisfied before any other proceeds would be paid to you or your creditors - unless there are other liens with higher priority.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.


As far as the tax lien is concerned, my colleague is correct. As to the retainer for your attorney's services, fee rates vary from city to city. However, it does appear a bit high. I recommend that you ask your attorney to explain how he/she computed the retainer and what is involved. If this is being handled on an hourly fee basis is any unused amount refundable? Then check a few other attorneys in your area so you can either get a lower fee or, at very least, feel comfortable that your attorney is being fair with you.

Category: Tax
Satisfied Customers: 3820
Experience: over 40 years experience in tax matters
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