There are a lot of factors that influence the availability and cost of most types of surety bonds. A federal tax lien is one of the most difficult circumstances to overcome. Even if an applicant has otherwise perfect credit, that notice of a lien can increase the cost of a surety bond by as much as 1000%. The question is why?
What exactly is a tax federal tax lien? A federal 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 your property, including real estate, personal property and financial assets, including your business, that needs the bond. This is how a lien affects you:
All of these greatly reduces the remedies available to the surety company if there were a claim on your bond as the IRS has already laid claim to all of your assets. Additionally, most surety bonds guarantee some kind of government code. If you don’t pay your taxes, the sureties view this as a violation of one of the most basic government codes. Shows a bad track record right off the bat. Finally, most surety bond rates are filed based on FICO credit scores. There is nothing I know of to tank a credit score faster than federal tax liens.