Tax Liens in Greenwood, Arkansas

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In Greenwood, 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 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 Greenwood, Arkansas tax authorities, to collect taxes that the property-owner has failed to pay.

Of course, a tax lien in Greenwood, 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. Nonetheless, 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 Greenwood, Arkansas

The actual process of setting up a Greenwood, Arkansas 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.

They will then mail a document called a "notice and demand," which lets the taxpayer know that they owe money on their taxes, and that they have a certain period of time (usually 10 days) to pay what they owe.

If this 10-day period expires without payment, the tax lien arises automatically. Once this happens, the tax authorities in Arkansas have all the options in the taxpayer's property that any other lien holder would have, containing priority over competing creditors.

Nonetheless, there are limits to how and when a tax lien can be enforced, at least under federal law. The IRS has 10 years to enforce a tax lien in Greenwood, Arkansas or anywhere else in the U.S. If it never bothers to take action to seize property that's subject to a tax lien, the lien simply ceases to exist after 10 years. This rule is in place to ensure that the government does not sit on its rights, and to keep potentially-valuable property from being encumbered forever. Essentially, it creates a measure of certainty for both parties.

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How Can a Greenwood, 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 perplexing legal issues.

Therefore, it's important that you hire a tax attorney in Greenwood, Arkansas to ensure that whatever legal rights you have in this situation are defended. Your attorney will also be able to advise you on how to best deal with the situation.

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