Tax Lien Lawyers in Durango
In Durango, Colorado, 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 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 Durango, Colorado.
However, like any other debt-collection method, a tax lien is worthless if the debtor has no considerable property on which a lien can be imposed. To get around this limitation, most tax liens in Durango, Colorado apply to after-acquired property (property obtained after the lien was created). Most other liens only apply to certain pieces of property, or property that the debtor owned at the time the lien went into effect.
Tax Lien Procedure in Durango, Colorado
In Durango, Colorado, the procedure for imposing a tax lien is relatively simple. First, the IRS makes a determination that a person is delinquent in their tax obligation.
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 (normally 10 days) to pay them without incurring a penalty.
If the back taxes are not paid before the deadline is up, the lien will normally take effect immediately, with no further action by the IRS or Colorado tax agency, giving them all the rights in your property that the law authorizes.
But, under federal law, there are limits to how tax liens can be enforced in Durango, Colorado, and elsewhere. Typically, the IRS has 10 years to try and enforce a tax lien. If no effort is made to enforce a tax lien for 10 years, the lien is automatically lifted, and the lien holder loses all rights in it. This rule exists to ensure that the government collects its taxes in a reasonable time period, and it prevents valuable property (which could otherwise be contributing to the economy by being bought and sold) is not laded with a lien for an indefinite period of time.
How Can a Durango, Colorado Tax Lien Lawyer Help?
If you receive notice from the federal government, or the government of Colorado that a tax lien has been imposed on your property, some pretty complex legal issues are necessarily involved.
Thankfully, Durango, Colorado tax attorneys can help. If you are facing the prospect of a tax lien, you should not hesitate to seek qualified legal advice, to ensure that your legal rights are protected.