Tax Lien Lawyers in Makawao

In Makawao, Hawaii, a "lien" is a security interest placed on a piece of property, typically land or a house, to secure the payment of a debt. It usually 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.

A tax lien, then, is simply a lien that is created for the specific purpose of collecting taxes from a delinquent tax payer in Makawao, Hawaii.

Tax liens in Makawao, Hawaii are ineffective if the taxpayer doesn't have any property to place the lien on. However, virtually any property, including that which the taxpayer obtains after the lien goes into effect, can be affected by a tax lien.

Tax Lien Procedure in Makawao, Hawaii

In Makawao, Hawaii, the procedure for imposing a tax lien is relatively simple. First, the IRS makes a determination that a person is delinquent in their tax obligation.

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 (typically 10 days) to pay them without incurring a penalty.

If that time period expires, and the debtor still hasn't paid, the Hawaii tax lien will go into effect automatically, with no further action required.

But, under federal law, there are limits to how tax liens can be enforced in Makawao, Hawaii, and elsewhere. Usually, the IRS has 10 years to try and enforce a tax lien. If no effort is made to enforce a tax lien for 10 years, the lien is automatically lifted, and the lien holder loses all rights in it. This rule exists to ensure that the government collects its taxes in a reasonable time period, and it prevents valuable property (which could otherwise be contributing to the economy by being bought and sold) is not laded with a lien for an indefinite period of time.

How Can a Makawao, Hawaii Tax Lien Lawyer Help?

If the federal government, or the government of Hawaii informs you that they intend to place a tax lien on your property, you will likely face some pretty intricate and daunting legal issues.

Thankfully for you, tax lawyers in Makawao, Hawaii 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.