Can I purchase or lease a new car with a federal tax lien on my credit report?

Asked almost 2 years ago - San Diego, CA

I have owed almost $60,000 to the IRS for about 5 years. I am on disability and I have no savings or assets that the IRS can take to satisfy the lien. I need a new car. My mother is going to help me with the down payment or lease payment. My question is this: can the IRS take the car if I buy it? Can they take it if I lease it, assuming that I can even qualify for the purchase? I would like to purchase or lease the car before the end of the year. Thank you!

Attorney answers (4)

  1. Joshua Branden Swigart


    Contributor Level 12


    Lawyers agree


    Answered . Counsel is correct, a Fed Tax Lien will be reported to The Credit Bureau upon being filed by the IRS.

    Hyde & Swigart is a law firm concentrating its efforts in the area of consumer law, the Fair Debt Collection... more
  2. Phillip Monroe Smith

    Contributor Level 18


    Lawyers agree

    Answered . A federal tax lien attaches to all real and personal property owned by the taxpayer. This also applies to after acquired property. It is extremely doubtful that someone would sell you a car in your name because of the tax lien, and your financial circumstances. It is equally unrealistic to assume that someone would co-sign for you to purchase a car that would be encumbered by a $60,000.00 federal tax lien. Your question is therefore completely as unrealistic as the "tooth fairy."

    This being said, your only realistic possibility is if someone leased or purchased a car in their name and insured you to drive it. If the car is in another person's name, then then IRS cannot take it if that person completely owns the lease or the car.

    Good luck!
    Phillip M. Smith Jr.
    Los Angeles Tax & Business Attorney
    Licensed in the United States Tax Court
    Call: 323-292-4116 or 562-505-1004

    THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can... more
  3. Tuella O Sykes

    Contributor Level 10


    Lawyers agree


    Answered . A Federal Tax Lien will be reported to the Credit Bureau once it is filed by the IRS. A simple credit check pulled by anyone checking your credit will see the Lien on your credit report. It will generally stay on their for 10 years. However, regardless of this you should be apply to apply for credit or purchase/leasing a vehicle. It will be up to the company willing to finance the vehicle if the lien will be an issue in obtaining credit for you. What may be required is a co-signor or some other credit worthy individual to guarantee financing.

    The Law Office of Tuella O. Sykes, PLLC 600 1st Avenue, Suite 307 Seattle, WA 98104 Phone: 206-721-0086 Fax: 206-... more
  4. Christopher Michael Larson

    Contributor Level 19


    Lawyers agree

    Answered . A tax lien definitely affects your ability to obtain credit. And if you buy it outright, they technically own it and get any proceeds if you later sell the car.

    You should call a tax attorney in your area and look into an Offer in Compromise before you do anything.

    Christopher Larson
    Insight Law
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