Tax Lien Lawyers in Lodi
In Lodi, 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 Lodi, California.
Tax liens in Lodi, 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 Lodi, California
The actual process of setting up a Lodi, 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.
Then, the taxpayer is sent a letter with a "notice and demand," which informs the taxpayer that the IRS has determined that they owe back taxes, and that they have a short period of time (typically 10 days) to pay them without incurring a penalty.
If this deadline expires, and the debtor does not pay the taxes they owe, the lien will take effect automatically. When this results, the IRS or California tax agency will have substantial rights against the taxpayer's property.
However, if the federal government does not seek to enforce a tax lien in Lodi, 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.
How Can a Lodi, 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.
Thus, 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 pursue the advice of a knowledgeable tax lawyer in Lodi, California as soon as you can.