Tax Liens in Los Alamitos, California
In Los Alamitos, 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 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 Los Alamitos, California.
Tax liens in Los Alamitos, 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 Los Alamitos, California
The actual process of setting up a Los Alamitos, California tax lien is usually pretty simple. The agency responsible for collecting taxes must first determine that a tax lien is warranted, usually 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 (usually 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 occurs, the IRS or California tax agency will have significant rights against the taxpayer's property.
However, 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 Los Alamitos, 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 prevent potentially-valuable property from being encumbered indefinitely. Basically, it creates a measure of certainty for both parties.
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How Can a Los Alamitos, 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 complicated legal issues are necessarily involved.
Accordingly, it's important that you hire a tax attorney in Los Alamitos, 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.