Tax Liens in Hercules, California
In Hercules, California, a "lien" is a security interest placed on a piece of property, normally land or a house, to secure the payment of a debt. It typically 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 Hercules, California.
Tax liens in Hercules, California are ineffective if the taxpayer doesn't have any property to place the lien on. However, practically 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 Hercules, California
The actual process of setting up a Hercules, California tax lien is normally pretty simple. The agency responsible for collecting taxes must first decide that a tax lien is warranted, normally by finding that the debtor owes a significant amount of back taxes.
Then, the IRS, or state tax authorities, send a "notice and demand," informing the taxpayer that they owe back taxes, and that they are obligated to pay their taxes within 10 days.
If this deadline expires, and the debtor does not pay the taxes they owe, the lien will take effect automatically. When this happens, the IRS or California tax agency will have considerable rights against the taxpayer's property.
But, these rights are limited. In Hercules, 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." Additionally, 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 Hercules, California Tax Lien Lawyer Help?
If the federal government, or the government of California informs you that they intend to place a tax lien on your property, you will likely face some pretty difficult and daunting legal issues.
Therefore, 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 obtain the advice of a seasoned tax lawyer in Hercules, California as soon as you can.