Tax Liens in Folsom, California
In Folsom, 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 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.
A "tax lien," then, is a lien held by the government to collect a tax-related debt from a private entity, such as a person or corporation in Folsom, California.
Tax liens in Folsom, California are ineffective if the taxpayer doesn't have any property to place the lien on. However, virtually any property, including that which the taxpayer obtains after the lien goes into effect, can be affected by a tax lien.
Tax Lien Procedure in Folsom, California
Imposing a tax lien in Folsom, California is normally an uncomplicated process. Usually, the tax authorities simply have to make a determination 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 immediate payment. It will typically give the taxpayer about 10 days to pay the demanded amount.
If that time period expires, and the debtor still hasn't paid, the California tax lien will go into effect automatically, with no further action required.
But, these rights are limited. In Folsom, 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." Second, it acknowledges the fact that any encumbrance on a piece of property, such as a lien, makes the property less valuable. By ensuring that the lien will either be satisfied or expire within 10 years, this prevents property from being withheld from the stream of commerce indefinitely.
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How Can a Folsom, California Tax Lien Lawyer Help?
If you are notified by the government that you owe back taxes in California, and that they are going to pursue a tax lien to collect their money, things can get very intricate, quite quickly.
Luckily, Folsom, California 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.