Tax Liens in Searcy, Arkansas
In Searcy, 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 Searcy, Arkansas tax authorities, to gather taxes that the property-owner has failed to pay.
However, like any other debt-collection method, a tax lien is worthless if the debtor has no substantial property on which a lien can be imposed. To get around this limitation, most tax liens in Searcy, Arkansas apply to after-acquired property (property obtained after the lien was created). Most other liens only apply to particular pieces of property, or property that the debtor owned at the time the lien went into effect.
Tax Lien Procedure in Searcy, Arkansas
In Searcy, Arkansas, the procedure for imposing a tax lien is relatively simple. First, the IRS makes a determination that a person is delinquent in their tax obligation.
Then, the taxpayer is sent a letter with a "notice and demand," which informs the taxpayer that the IRS has determined that they owe back taxes, and that they have a short period of time (typically 10 days) to pay them without incurring a penalty.
If this deadline expires, and the debtor does not pay the taxes they owe, the lien will take effect automatically. When this results, the IRS or Arkansas tax agency will have substantial rights against the taxpayer's property.
However, in Searcy, 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 substantial 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 narrow period of time.
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How Can a Searcy, Arkansas Tax Lien Lawyer Help?
If you receive notice from the federal government, or the government of Arkansas that a tax lien has been imposed on your property, some pretty intricate legal issues are necessarily involved.
Luckily, Searcy, 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.