Tax Lien Lawyers in Montpelier
A "lien" in Montpelier, Vermont is a type of security interest that one person or entity has in someone else's property. Normally, 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 funds 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 acquire the payment of back taxes. A tax lien in Montpelier, 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 Montpelier, 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. Nonetheless, a tax lien can be applied to property that the taxpayer gains after the lien goes into effect.
Tax Lien Procedure in Montpelier, Vermont
The actual process of setting up a Montpelier, Vermont tax lien is typically pretty simple. The agency responsible for collecting taxes must first decide that a tax lien is warranted, typically by finding that the debtor owes a significant amount of back 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 this deadline expires, and the debtor does not pay the taxes they owe, the lien will take effect automatically. When this results, the IRS or Vermont tax agency will have substantial rights against the taxpayer's property.
But, these rights are limited. In Montpelier, Vermont, 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 Montpelier, Vermont Tax Lien Lawyer Help?
If you receive notice from the federal government, or the government of Vermont that a tax lien has been imposed on your property, some pretty intricate legal issues are necessarily involved.
Therefore, it's important that you contact a tax attorney in Montpelier, Vermont to ensure that whatever legal rights you have in this situation are defended. Your attorney will also be able to advise you on how to best deal with the situation.