Tax Liens in Jonesboro, Arkansas
In Jonesboro, Arkansas, 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.
As you might have gathered, a "tax lien" is simply a lien placed on property by the IRS or Jonesboro, Arkansas tax authorities, to gather taxes that the property-owner has failed to pay.
Of course, a tax lien in Jonesboro, 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. Apparently, this makes it quite a bit easier for the government to collect its taxes.
Tax Lien Procedure in Jonesboro, Arkansas
The actual process of setting up a Jonesboro, Arkansas tax lien is typically pretty simple. The agency responsible for collecting taxes must first determine that a tax lien is warranted, typically by finding that the debtor owes a significant amount of back taxes.
At this point, the taxpayer will receive a letter containing a "notice and demand," which, as the name suggests, gives notice that the recipient owes taxes, and demands immediate payment. It will typically give the taxpayer about 10 days to pay the demanded amount.
If this 10-day period expires without payment, the tax lien arises automatically. Once this happens, the tax authorities in Arkansas have all the rights in the taxpayer's property that any other lien holder would have, including priority over competing creditors.
But, under federal law, there are limits to how tax liens can be enforced in Jonesboro, Arkansas, 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 Jonesboro, Arkansas Tax Lien Lawyer Help?
If you end up having a tax lien imposed on your property in Arkansas, you will probably have to deal with some fairly challenging legal issues, which might be complex to a layperson.
Luckily, Jonesboro, Arkansas tax attorneys can help. If you are facing the prospect of a tax lien, you should not hesitate to seek skilled legal advice, to ensure that your legal rights are protected.