Tax Liens in Farmington, Arkansas
In Farmington, Arkansas, 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 Farmington, Arkansas tax authorities, to collect taxes that the property-owner has failed to pay.
Of course, a tax lien in Farmington, Arkansas isn't worth much more than the paper it's printed on if the debtor doesn't own any property of value, on which a lien could be placed. However, a tax lien applies to property that the taxpayer obtains even after the lien is created. Obviously, this makes it quite a bit easier for the government to collect its taxes.
Tax Lien Procedure in Farmington, Arkansas
The actual process of setting up a Farmington, Arkansas 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.
Then, the IRS, or state tax authorities, send a "notice and demand," informing the taxpayer that they owe back taxes, and that they are required to pay their taxes within 10 days.
If the back taxes are not paid before the deadline is up, the lien will usually take effect immediately, with no further action by the IRS or Arkansas tax agency, giving them all the rights in your property that the law allows.
But, under federal law, there are limits to how tax liens can be enforced in Farmington, Arkansas, and elsewhere. Generally, 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 Farmington, Arkansas Tax Lien Lawyer Help?
If you find yourself on the receiving end of a tax lien in Arkansas, you are going to have to wade through some substantial and complex legal issues.
Accordingly, it's important that you hire a tax attorney in Farmington, Arkansas 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.