Tax Lien Lawyers in Scottsburg

In Scottsburg, Indiana, a "lien" is a type of property right, which is created by a court to acquire payment of a lawful debt. Usually, a valid lien gives its holder the right to seize the property subject to it, or at least some of the property's equity, to satisfy the debt. If the owner sells a piece of property that's subject to a lien, the creditor who owns the lien may be entitled to the proceeds, up to the amount you owe them. It can additionally put them "first in line" compared to other creditors, if the debtor files for bankruptcy.

A "tax lien" is simply a lien placed on a piece of property by the state or local government, to acquire the payment of back taxes. A tax lien in Scottsburg, Indiana can arise to secure the payment of any federal or state tax, including income tax, estate tax, or gift tax.

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 Scottsburg, Indiana apply to after-acquired property (property acquired 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 Scottsburg, Indiana

The process of imposing a tax lien on property in Scottsburg, Indiana is typically fairly simple. The initial step is for the IRS or local tax agency to decide that a person truly owes back taxes, and that it is worth the effort to impose a lien.

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 (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 Indiana have all the options in the taxpayer's property that any other lien holder would have, containing priority over competing creditors.

But, under federal law, there are limits to how tax liens can be enforced in Scottsburg, Indiana, 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 Scottsburg, Indiana Tax Lien Lawyer Help?

If the federal government, or the government of Indiana informs you that they intend to place a tax lien on your property, you will likely face some pretty confusing and daunting legal issues.

Therefore, it's important that you contact a tax attorney in Scottsburg, Indiana to ensure that whatever legal rights you have in this situation are defended. Your attorney will also be able to advise you on how to best deal with the situation.