Tax Lien Lawyers in Loomis
In Loomis, California, a "lien" is a security interest placed on a piece of property, normally land or a house, to secure the payment of a debt. It typically 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 Loomis, California.
Tax liens in Loomis, California are ineffective if the taxpayer doesn't have any property to place the lien on. However, practically 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 Loomis, California
The actual process of setting up a Loomis, California tax lien is normally pretty simple. The agency responsible for collecting taxes must first decide that a tax lien is warranted, normally 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 decided that they owe back taxes, and that they have a short period of time (normally 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 happens, the IRS or California tax agency will have considerable rights against the taxpayer's property.
Nonetheless, there are limits to how and when a tax lien can be enforced, at least under federal law. The IRS has 10 years to enforce a tax lien in Loomis, California or anywhere else in the U.S. If it never bothers to take action to seize property that's subject to a tax lien, the lien simply ceases to exist after 10 years. This rule is in place to ensure that the government does not sit on its rights, and to keep potentially-valuable property from being encumbered forever. Essentially, it creates a measure of certainty for both parties.
How Can a Loomis, California Tax Lien Lawyer Help?
If you receive notice from the federal government, or the government of California that a tax lien has been imposed on your property, some pretty complex legal issues are necessarily involved.
Fortunately for you, tax lawyers in Loomis, California are experts at dealing with matters such as these, and can make sure your rights are safeguarded, and advise you on the best way to proceed, if you are facing the prospect of a tax lien.