Tax Liens in La Canada Flintridge, California
In La Canada Flintridge, 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 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 La Canada Flintridge, California.
Tax liens in La Canada Flintridge, 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 La Canada Flintridge, California
The actual process of setting up a La Canada Flintridge, California tax lien is usually pretty simple. The agency responsible for collecting taxes must first decide that a tax lien is warranted, usually 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 quick payment. It will usually give the taxpayer about 10 days to pay the demanded amount.
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 La Canada Flintridge, 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.
Find a La Canada Flintridge Lawyer that Specializes in Your Area of Need:
How Can a La Canada Flintridge, 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 perplexing and daunting legal issues.
Therefore, it's important that you hire a tax attorney in La Canada Flintridge, California to ensure that whatever legal rights you have in this situation are defended. Your attorney will also be able to advise you on how to best deal with the situation.