Tax Liens in Florence, Alabama
In Florence, Alabama, 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 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 Florence, Alabama tax authorities, to gather taxes that the property-owner has failed to pay.
However, a tax lien in Florence, 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 Florence, Alabama
The actual process of setting up a Florence, Alabama tax lien is typically pretty simple. The agency responsible for collecting taxes must first decide that a tax lien is warranted, typically 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.
But, under federal law, there are limits to how tax liens can be enforced in Florence, Alabama, 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.
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How Can a Florence, 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 intricate legal issues are necessarily involved.
Thankfully for you, tax lawyers in Florence, 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.