Tax Liens in Madison County, Alabama
In Madison County, Alabama, a "lien" is a security interest placed on a piece of property, normally land or a house, to secure the payment of a debt. It typically 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 Madison County, Alabama tax authorities, to compile taxes that the property-owner has failed to pay.
However, a tax lien in Madison County, 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 Madison County, Alabama
The actual process of setting up a Madison County, Alabama tax lien is normally pretty simple. The agency responsible for collecting taxes must first determine that a tax lien is warranted, normally 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 determined that they owe back taxes, and that they have a short period of time (normally 10 days) to pay them without incurring a penalty.
If the back taxes are not paid before the deadline is up, the lien will normally take effect immediately, with no further action by the IRS or Alabama tax agency, giving them all the rights in your property that the law authorizes.
However, if the federal government does not seek to enforce a tax lien in Madison County, 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 Madison County, Alabama Tax Lien Lawyer Help?
If you are notified by the government that you owe back taxes in Alabama, and that they are going to pursue a tax lien to collect their money, things can get very convoluted, extremely quickly.
Accordingly, it's important that you retain a tax attorney in Madison County, Alabama to ensure that whatever legal rights you have in this situation are protected. Your attorney will also be able to advise you on how to best deal with the situation.