Tax Lien Lawyers in Hermosa Beach
In Hermosa Beach, 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 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 Hermosa Beach, California.
Tax liens in Hermosa Beach, California are ineffective if the taxpayer doesn't have any property to place the lien on. However, essentially 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 Hermosa Beach, California
The actual process of setting up a Hermosa Beach, California tax lien is usually pretty simple. The agency responsible for collecting taxes must first determine that a tax lien is warranted, usually 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 required 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 occurs, the IRS or California tax agency will have significant rights against the taxpayer's property.
But, these rights are limited. In Hermosa Beach, 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." Furthermore, 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.
How Can a Hermosa Beach, 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 complex to a layperson.
Accordingly, if you think that any piece of property you own might become subject to a tax lien in Hermosa Beach, California, you should not hesitate to seek the advice of a competent tax attorney immediately.