Tax Liens in Kerman, California
In Kerman, 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 Kerman, California.
Tax liens in Kerman, 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 Kerman, California
The actual process of setting up a Kerman, California tax lien is typically pretty simple. The agency responsible for collecting taxes must first determine that a tax lien is warranted, typically by finding that the debtor owes a significant amount of back taxes.
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 this 10-day period expires without payment, the tax lien arises automatically. Once this happens, the tax authorities in California have all the rights in the taxpayer's property that any other lien holder would have, including priority over competing creditors.
But, these rights are limited. In Kerman, 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 Kerman, 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 intricate and daunting legal issues.
Accordingly, it's important that you contact a tax attorney in Kerman, California to ensure that whatever legal rights you have in this situation are protected. Your attorney will also be able to advise you on how to best deal with the situation.