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IRS tax liens: the queen of hip-hop's big bill

The only inevitable things, the old saying goes, are death and taxes. That is surely an overly pessimistic view of the world. But in the case of taxes, there is certainly a sense that, as taxpayers, we can pay now or we can pay later.

For one reason or another, however, paying on time does not always happen. As we discussed in our April 18 post, many taxpayers in Texas and across the nation struggle with tax debt. And one of the ways the IRS can try to collect that debt is through a tax lien.

The tax debt case of a prominent singer, Mary J. Blige, is an example of how this can play out. Last week, the IRS imposed a tax lien for unpaid federal taxes in an eye-catching amount. The amount was $3.4 million, covering tax years 2009 through 2011.

That is not all, either. New Jersey had already imposed its own tax lien for more than $900,000 in unpaid state taxes.

The 42-yer-old Blige has won Grammy awards and has been called the Queen of Hip-Hop. But she has struggled with financial problems recently.

In legal terms, there is a difference between a tax lien and a tax levy. A tax lien is a legal claim made by the government against someone's real or personal property for unpaid tax debt. A levy is the action by which the government actually takes a taxpayer's property.

But even before imposing a lien, the IRS must go through a formal process that beings with publicly filing a Notice of Federal Tax Lien. Taxes may be inevitable, but federal tax liens must follow this process to be valid.

Source: "Mary J. Blige Faces $3.4 IRS Tax Lien," Accounting Today, Michael Cohn, May 24, 2013

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