Tax lien

Definition

A government claim over everything the business owns for unpaid tax.

Why It Matters

It is the one claim that does not queue politely. A filed federal tax lien reaches what the business owns and anything it acquires later, and it ranks ahead of a lender that perfects after the filing, the buyer's bank included. That is why a bank will not close over one and why it has to be paid and released at the table. The payroll trust-fund portion is the sharpest edge, because responsible people can be assessed personally for it and a buyer who keeps the same entity can inherit that argument. Ask for account transcripts from every taxing authority, not a screenshot of a balance.

In numbers: An unpaid $60,000 payroll tax bill, once its notice is filed, is a claim against every asset the seller is selling, and the buyer's bank, filing later, would stand behind it until it is paid at closing.