Tax Lien Lawyers in New Castle

In New Castle, 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 New Castle, 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 New Castle, 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 New Castle, Colorado

In New Castle, Colorado, the process for creating a tax lien is fairly uncomplicated. First, the tax authorities determine that a taxpayer truly owes taxes that they haven't paid (that they're delinquent in their 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 10-day period expires without payment, the tax lien arises automatically. Once this happens, the tax authorities in Colorado have all the rights in the taxpayer's property that any other lien holder would have, including priority over competing creditors.

But, under federal law, there are limits to how tax liens can be enforced in New Castle, Colorado, and elsewhere. Usually, 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 New Castle, Colorado Tax Lien Lawyer Help?

If you end up having a tax lien imposed on your property in Colorado, you will probably have to deal with some fairly challenging legal issues, which might be confusing to a layperson.

Luckily, New Castle, Colorado tax attorneys can help. If you are facing the prospect of a tax lien, you should not hesitate to seek skilled legal advice, to ensure that your legal rights are protected.