Tax Lien Lawyers in Colchester

A "lien" in Colchester, Vermont is a type of security interest that one person or entity has in someone else's property. Typically, a lien is created by a court, to secure payment of a debt. A lien gives its holder many rights in the property that is subject to it, including the right to seize the proceeds if the property is sold, and priority access to the property, in front of other creditors.

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

However, a tax lien in Colchester, Vermont 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 Colchester, Vermont

Imposing a tax lien in Colchester, Vermont is typically an uncomplicated process. Generally, the tax authorities simply have to make a determination that the taxpayer is delinquent in their taxes, and that imposing and enforcing a tax lien will actually be worth the effort.

They will then mail a document called a "notice and demand," which lets the taxpayer know that they owe money on their taxes, and that they have a certain period of time (usually 10 days) to pay what they owe.

If that time period expires, and the debtor still hasn't paid, the Vermont tax lien will go into effect automatically, with no further action required.

However, if the federal government does not seek to enforce a tax lien in Colchester, Vermont within 10 years of imposing it, federal law dictates that the lien automatically expires. This is effectively a statute of limitations on a tax lien, meant to encourage the federal government to collect its taxes in a reasonable period of time, and ensure that property is not encumbered by a lien forever.

How Can a Colchester, Vermont Tax Lien Lawyer Help?

If you are notified by the government that you owe back taxes in Vermont, and that they are going to pursue a tax lien to collect their money, things can get very complicated, very quickly.

Luckily for you, tax lawyers in Colchester, Vermont are experts at dealing with matters such as these, and can make sure your rights are protected, and advise you on the best way to proceed, if you are facing the prospect of a tax lien.