Tax Liens in Aliso Viejo, California
In Aliso Viejo, California, 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 Aliso Viejo, California tax authorities, to collect 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 significant property on which a lien can be imposed. To get around this limitation, most tax liens in Aliso Viejo, California apply to after-acquired property (property acquired after the lien was created). Most other liens only apply to specific pieces of property, or property that the debtor owned at the time the lien went into effect.
Tax Lien Procedure in Aliso Viejo, California
Imposing a tax lien in Aliso Viejo, California is typically an uncomplicated process. Generally, the tax authorities simply have to make a decision that the taxpayer is delinquent in their taxes, and that imposing and enforcing a tax lien will actually be worth the effort.
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 10-day period expires without payment, the tax lien arises automatically. Once this happens, the tax authorities in California have all the options in the taxpayer's property that any other lien holder would have, containing priority over competing creditors.
But, under federal law, there are limits to how tax liens can be enforced in Aliso Viejo, California, 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 Aliso Viejo, California Tax Lien Lawyer Help?
If you end up having a tax lien imposed on your property in California, you will probably have to deal with some fairly difficult legal issues, which might be intricate to a layperson.
Fortunately, Aliso Viejo, California 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.