Tax Liens in Headland, Alabama
In Headland, 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 proceeds 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 Headland, Alabama tax authorities, to collect taxes that the property-owner has failed to pay.
However, a tax lien in Headland, 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. However, a tax lien can be applied to property that the taxpayer acquires after the lien goes into effect.
Tax Lien Procedure in Headland, Alabama
The actual process of setting up a Headland, Alabama tax lien is usually pretty simple. The agency responsible for collecting taxes must first determine that a tax lien is warranted, usually by finding that the debtor owes a significant amount of back taxes.
They will then mail a document called a "notice and demand," which lets the taxpayer know that they owe money on their taxes, and that they have a certain period of time (usually 10 days) to pay what they owe.
If the deadline passes without payment, most tax liens in Alabama take effect automatically, giving the tax collectors all of the rights in your property that any other lien holder would have.
However, if the federal government does not seek to enforce a tax lien in Headland, Alabama within 10 years of imposing it, federal law dictates that the lien automatically expires. This is effectively a statute of limitations on a tax lien, meant to encourage the federal government to collect its taxes in a reasonable period of time, and ensure that property is not encumbered by a lien forever.
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How Can a Headland, Alabama Tax Lien Lawyer Help?
If the federal government, or the government of Alabama informs you that they intend to place a tax lien on your property, you will likely face some pretty complicated and daunting legal issues.
Luckily for you, tax lawyers in Headland, Alabama are experts at dealing with matters such as these, and can make sure your rights are protected, and advise you on the best way to proceed, if you are facing the prospect of a tax lien.