Tax Liens in Lanett, Alabama
In Lanett, 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 Lanett, Alabama tax authorities, to collect taxes that the property-owner has failed to pay.
However, a tax lien in Lanett, 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 Lanett, Alabama
The actual process of setting up a Lanett, 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 taxpayer is sent a letter with a "notice and demand," which informs the taxpayer that the IRS has decided that they owe back taxes, and that they have a short period of time (usually 10 days) to pay them without incurring a penalty.
If this 10-day period expires without payment, the tax lien arises automatically. Once this happens, the tax authorities in Alabama have all the options in the taxpayer's property that any other lien holder would have, containing priority over competing creditors.
Nonetheless, in Lanett, 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 Lanett, Alabama Tax Lien Lawyer Help?
If you find yourself on the receiving end of a tax lien in Alabama, you are going to have to wade through some substantial and perplexing legal issues.
Fortunately, Lanett, Alabama tax attorneys can help. If you are facing the prospect of a tax lien, you should not hesitate to seek competent legal advice, to ensure that your legal rights are protected.