Tax Lien Lawyers in Rutland

A "lien" in Rutland, Vermont is a type of security interest that one person or entity has in someone else's property. Usually, 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 Rutland, 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 Rutland, 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 Rutland, Vermont

The actual process of setting up a Rutland, Vermont tax lien is normally pretty simple. The agency responsible for collecting taxes must first determine that a tax lien is warranted, normally by finding that the debtor owes a significant amount of back taxes.

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 specific period of time (normally 10 days) to pay what they owe.

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

But, these rights are limited. In Rutland, 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." Furthermore, it acknowledges the fact that any encumbrance on a piece of property, such as a lien, makes the property less valuable. By ensuring that the lien will either be satisfied or expire within 10 years, this prevents property from being withheld from the stream of commerce indefinitely.

How Can a Rutland, Vermont Tax Lien Lawyer Help?

If you end up having a tax lien imposed on your property in Vermont, you will probably have to deal with some fairly hard legal issues, which might be complex to a layperson.

Thankfully, Rutland, Vermont tax attorneys can help. If you are facing the prospect of a tax lien, you should not hesitate to seek qualified legal advice, to ensure that your legal rights are protected.