Tax Lien Lawyers in Woodbridge
A "lien" in Woodbridge, 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 several 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 likely that the lien holder will collect something.
In Woodbridge, New Jersey, 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.
Tax Liens in Woodbridge, New Jersey are usually only effective if the taxpayer has a significant amount of property on which a lien can be placed. However, it's essential to note that essentially any property, including that which is acquired after the lien is imposed, can be subject to a tax lien.
Tax Lien Procedure in Woodbridge, New Jersey
The actual process of setting up a Woodbridge, New Jersey 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 New Jersey 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 Woodbridge, New Jersey, 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 Woodbridge, New Jersey Tax Lien Lawyer Help?
If you find yourself on the receiving end of a tax lien in New Jersey, you are going to have to wade through some substantial and confusing legal concerns.
Accordingly, if you think that any piece of property you own might become subject to a tax lien in Woodbridge, New Jersey, you should not hesitate to seek the advice of a skilled tax attorney immediately.