Tax Lien Lawyers in Fountain
In Fountain, Colorado, 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 Fountain, Colorado.
However, like any other debt-collection method, a tax lien is worthless if the debtor has no substantial property on which a lien can be imposed. To get around this limitation, most tax liens in Fountain, Colorado apply to after-acquired property (property obtained after the lien was created). Most other liens only apply to particular pieces of property, or property that the debtor owned at the time the lien went into effect.
Tax Lien Procedure in Fountain, Colorado
In Fountain, 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 (typically 10 days) to pay them without incurring a penalty.
If that time period expires, and the debtor still hasn't paid, the Colorado tax lien will go into effect automatically, with no further action required.
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 Fountain, Colorado 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.
How Can a Fountain, Colorado Tax Lien Lawyer Help?
If you find yourself on the receiving end of a tax lien in Colorado, you are going to have to wade through some substantial and confusing legal concerns.
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 Fountain, Colorado as soon as you can.