Tax Liens in Gadsden, Alabama
In Gadsden, Alabama, a "lien" is a security interest placed on a piece of property, usually land or a house, to secure the payment of a debt. It generally gives a creditor the right to take ownership of any equity that exists in the property, to secure the payment of the debt. If the owner sells the property, the creditor may also be entitled to the funds of the sale, up to the amount owed. It can also give the holder of the lien a higher priority status, giving them an advantage over competing creditors, if the debtor files bankruptcy.
As you might have gathered, a "tax lien" is simply a lien placed on property by the IRS or Gadsden, Alabama tax authorities, to collect taxes that the property-owner has failed to pay.
However, a tax lien in Gadsden, Alabama will be ineffective if the debtor doesn't own any valuable property to encumber with a lien. As with any debt, the creditor can't collect if the debtor doesn't have any assets. Nonetheless, a tax lien can be applied to property that the taxpayer gains after the lien goes into effect.
Tax Lien Procedure in Gadsden, Alabama
The actual process of setting up a Gadsden, Alabama tax lien is usually pretty simple. The agency responsible for collecting taxes must first decide that a tax lien is warranted, usually by finding that the debtor owes a significant amount of back taxes.
Then, the IRS, or state tax authorities, send a "notice and demand," informing the taxpayer that they owe back taxes, and that they are obligated to pay their taxes within 10 days.
If the deadline passes without payment, most tax liens in Alabama take effect automatically, giving the tax collectors all of the options in your property that any other lien holder would have.
Nonetheless, in Gadsden, Alabama, and anywhere else in America, a tax lien only lasts for 10 years, and then it automatically expires. If the IRS fails to exercise the considerable rights that it has under a tax lien within that period of time, it is assumed that they never intend to do so, and the lien will cease to exist. This ensures that valuable property is only kept out of the economy for a limited period of time.
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How Can a Gadsden, Alabama Tax Lien Lawyer Help?
If you receive notice from the federal government, or the government of Alabama that a tax lien has been imposed on your property, some pretty complicated legal issues are necessarily involved.
Luckily for you, tax lawyers in Gadsden, Alabama are experts at dealing with matters such as these, and can make sure your rights are safeguarded, and advise you on the best way to proceed, if you are facing the prospect of a tax lien.