Tax Liens in Magnolia, Arkansas
In Magnolia, 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 Magnolia, Arkansas tax authorities, to collect taxes that the property-owner has failed to pay.
Of course, a tax lien in Magnolia, 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 Magnolia, Arkansas
The actual process of setting up a Magnolia, 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.
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 quick payment. It will usually give the taxpayer about 10 days to pay the demanded amount.
If this deadline expires, and the debtor does not pay the taxes they owe, the lien will take effect automatically. When this occurs, the IRS or Arkansas tax agency will have significant rights against the taxpayer's property.
Nonetheless, in Magnolia, Arkansas, and anywhere else in America, a tax lien only lasts for 10 years, and then it automatically expires. If the IRS fails to exercise the considerable rights that it has under a tax lien within that period of time, it is assumed that they never intend to do so, and the lien will cease to exist. This ensures that valuable property is only kept out of the economy for a limited period of time.
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How Can a Magnolia, 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.
Fortunately, Magnolia, Arkansas tax attorneys can help. If you are facing the prospect of a tax lien, you should not hesitate to seek competent legal advice, to ensure that your legal rights are protected.