Tax Liens in El Cerrito, California
In El Cerrito, California, 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 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.
A "tax lien," then, is a lien held by the government to collect a tax-related debt from a private entity, such as a citizen or corporation in El Cerrito, California.
Tax liens in El Cerrito, California are ineffective if the taxpayer doesn't have any property to place the lien on. However, basically any property, including that which the taxpayer acquires after the lien goes into effect, can be affected by a tax lien.
Tax Lien Procedure in El Cerrito, California
Imposing a tax lien in El Cerrito, California is normally an uncomplicated process. Usually, 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 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 California have all the options in the taxpayer's property that any other lien holder would have, containing priority over competing creditors.
But, these rights are limited. In El Cerrito, California, and everywhere else in the United States, the IRS has 10 years to enforce a tax lien. If they do nothing about it within 10 years, the lien expires. This rule exists for a few reasons. First, it encourages the IRS to act as quickly and efficiently as possible, and not "sit on its rights." Also, it acknowledges the fact that any encumbrance on a piece of property, such as a lien, makes the property less valuable. By guaranteeing that the lien will either be satisfied or expire within 10 years, this prevents property from being withheld from the stream of commerce forever.
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How Can a El Cerrito, 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 challenging legal issues, which might be complicated to a layperson.
Thus, it should go without saying that if you are facing the prospect of your home or vehicle being slapped with a tax lien, you need to pursue the advice of a reliable tax lawyer in El Cerrito, California as soon as you can.