Tax Lien Lawyers in Cottage Grove

In Cottage Grove, Minnesota, a "lien" is a type of property right, which is created by a court to acquire payment of a lawful debt. Generally, 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 also put them "first in line" compared to other creditors, if the debtor files for bankruptcy.

A tax lien, then, is simply a lien that is formed for the particular purpose of collecting taxes from a delinquent tax payer in Cottage Grove, Minnesota.

However, a tax lien in Cottage Grove, Minnesota 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. Nonetheless, a tax lien can be applied to property that the taxpayer gains after the lien goes into effect.

Tax Lien Procedure in Cottage Grove, Minnesota

In Cottage Grove, Minnesota, the process for creating a tax lien is fairly uncomplicated. First, the tax authorities decide that a taxpayer actually owes taxes that they haven't paid (that they're delinquent in their taxes).

Then, the IRS, or state tax authorities, send a "notice and demand," informing the taxpayer that they owe back taxes, and that they are obligated to pay their taxes within 10 days.

If the back taxes are not paid before the deadline is up, the lien will usually take effect immediately, with no further action by the IRS or Minnesota tax agency, giving them all the rights in your property that the law allows.

But, these rights are limited. In Cottage Grove, Minnesota, and everywhere else in the United States, the IRS has 10 years to enforce a tax lien. If they do nothing about it within 10 years, the lien expires. This rule exists for a few reasons. First, it encourages the IRS to act as quickly and efficiently as possible, and not "sit on its rights." Also, it acknowledges the fact that any encumbrance on a piece of property, such as a lien, makes the property less valuable. By guaranteeing that the lien will either be satisfied or expire within 10 years, this prevents property from being withheld from the stream of commerce forever.

How Can a Cottage Grove, Minnesota Tax Lien Lawyer Help?

If you receive notice from the federal government, or the government of Minnesota that a tax lien has been imposed on your property, some pretty complicated legal issues are necessarily involved.

So, 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 seek the advice of a reputable tax lawyer in Cottage Grove, Minnesota as soon as you can.