Tax Liens in La Palma, California
In La Palma, 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 La Palma, California.
Tax liens in La Palma, 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 La Palma, California
The actual process of setting up a La Palma, 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 the deadline passes without payment, most tax liens in California take effect automatically, giving the tax collectors all of the rights in your property that any other lien holder would have.
However, if the federal government does not seek to enforce a tax lien in La Palma, California within 10 years of imposing it, federal law dictates that the lien automatically expires. This is effectively a statute of limitations on a tax lien, meant to encourage the federal government to collect its taxes in a reasonable period of time, and ensure that property is not encumbered by a lien forever.
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How Can a La Palma, 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, La Palma, 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.