Tax Lien Lawyers in Berkeley Heights

A "lien" in Berkeley Heights, New Jersey is a property right that a person or entity has in property owned by someone else, created by law, for the purpose of enforcing a debt. A lien gives its holder various rights in the property of another person, including the right to seize the proceeds of a sale of the property, and, if the debtor files for bankruptcy, the right to go to the front of the line among other creditors, making it more possible that the lien holder will collect something.

As you might have gathered, a "tax lien" is simply a lien placed on property by the IRS or Berkeley Heights, New Jersey tax authorities, to gather taxes that the property-owner has failed to pay.

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 Berkeley Heights, New Jersey 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 Berkeley Heights, New Jersey

Imposing a tax lien in Berkeley Heights, New Jersey is normally an uncomplicated process. Usually, the tax authorities simply have to make a decision that the taxpayer is delinquent in their taxes, and that imposing and enforcing a tax lien will actually be worth the effort.

At this point, the taxpayer will receive a letter containing a "notice and demand," which, as the name suggests, gives notice that the recipient owes taxes, and demands quick payment. It will typically give the taxpayer about 10 days to pay the demanded amount.

If this 10-day period expires without payment, the tax lien arises automatically. Once this happens, the tax authorities in New Jersey have all the options in the taxpayer's property that any other lien holder would have, containing priority over competing creditors.

But, these rights are limited. In Berkeley Heights, New Jersey, 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." Additionally, 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 Berkeley Heights, New Jersey Tax Lien Lawyer Help?

If the federal government, or the government of New Jersey 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, if you think that any piece of property you own might become subject to a tax lien in Berkeley Heights, New Jersey, you should not delay to seek the advice of a skilled tax attorney immediately.