Cases & Investigations

Lawsuit Investigation: Tax Liens

PRACTICE AREAS: Consumer Protection
CASE STATUS: Under Investigation

Berger & Montague, P.C. is investigating a potential class action lawsuit on behalf of anyone who has paid off a tax lien within the last two years.

What is a tax lien?

A tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest in all of your property, including real estate, personal property, and financial assets.

A federal tax lien exists after the IRS puts your balance due on the books (assesses your liability), sends you a bill that explains how much you owe (Notice and Demand for Payments), and you neglect or refuse to fully pay the debt in time. The IRS then files a public document-the Notice of Federal Tax Lien-to alert creditors that the government has a legal right to your property.

In order to get rid of a tax lien, you must pay your tax debt in full. The IRS will release your lien within 30 days after you have paid your tax debt.

How does a tax lien affect me?

A tax lien affects you in the following ways:

  • Assets-a lien attaches to all of your assets (such as property, securities, vehicles, etc.) and future assets acquired during the duration of the lien.
  • Credit-once the IRS files a Notice of Federal Tax Lien, it may limit your ability to get credit.
  • Business-the lien attaches to all business property and to all rights to business property, including counts receivable.
  • Bankruptcy-if you file for bankruptcy, your tax debt, lien, and Notice of Federal Tax Lien may continue after the bankruptcy.

Why are you investigating a potential class action about this?

Several class actions challenging tax lien programs have already been filed.

In 2013, a lawsuit seeking to stop tax-lien investors from taking homes through foreclosures in Washington, D.C. was filed. The lawsuit seeks compensation for people whose homes were taken after the city imposed liens for unpaid property taxes and then sold them at auction to private investors, some of whom increased the tax bill by thousands of dollars.

In 2016, defendants in a New Jersey class action that accused 20 companies and various individuals of conspiring in a price-fixing scheme to raise the interest rates of tax sale certificates agreed to pay a $9.5 million settlement.

New Jersey municipalities hold public auctions each year to sell tax sale certificates, which are considered liens on the real property. Plaintiffs alleged that the defendants violated antitrust laws by entering into an agreement to divide the available tax sale certificates among the different companies and not to bid against each other at the tax sales certificates auction. According to the plaintiffs, this price-fixing behavior made it more expensive for affected property owners to pay off their tax liens.

If you have paid off a tax lien within the last two years, contact Berger & Montague. You may be able to file a class action lawsuit.

Do I have to pay to consult with an attorney?

We are happy to talk with you about your potential claims free of charge. If we decide to represent you in a lawsuit, we will enter into a written contingent fee agreement with you. A contingent fee agreement means we only get paid if we win, and that we will receive our fees from the amount paid by the Defendant in the case.

Please contact us to discuss the details of your case. You may:

  1. Use the contact form on this page
  2. Email info@bm.net
  3. Call (800) 424-6690

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