Tax Lien Lawyers in Ellsworth
In Ellsworth, Maine, a "lien" is a type of property right, which is created by a court to obtain 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.
In Ellsworth, Maine, a "tax lien" is simply a lien imposed by the government to gather back taxes from a person or corporation, when other methods for collecting have failed.
However, a tax lien in Ellsworth, Maine will be ineffective if the debtor doesn't own any valuable property to encumber with a lien. As with any debt, the creditor can't collect if the debtor doesn't have any assets. However, a tax lien can be applied to property that the taxpayer acquires after the lien goes into effect.
Tax Lien Procedure in Ellsworth, Maine
The actual process of setting up an Ellsworth, Maine tax lien is typically pretty simple. The agency responsible for collecting taxes must first determine that a tax lien is warranted, typically 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 (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 Maine have all the rights in the taxpayer's property that any other lien holder would have, including priority over competing creditors.
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 Ellsworth, Maine 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 Ellsworth, Maine Tax Lien Lawyer Help?
If you find yourself on the receiving end of a tax lien in Maine, 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 Ellsworth, Maine as soon as you can.