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Federal Tax Liens – A Legal Tool Against Tax Defaulters

The federal government imposes tax liens on property to assure taxes accruing to it are paid. They may be enforced in lieu of income taxes, delinquent payments on real or personal property and other taxes.


Federal Tax Liens - Ensuring the Collection of Taxes

The Internal Revenue Code of the United States ensures the collection of taxes and any additional amount to it including penalties through federal tax liens. The amount is computed the moment the property is assessed and continues until it is paid or unenforceable due to a lapse of time. Taxes are supposed to be paid within ten days after the written demand and notice. Federal tax liens automatically spring from nonpayment of such taxes. It covers any property, which is acquired during the life of the lien. Limitations as to the unenforceability of the lien due to lapse of time are contained in the Internal Revenue Code.

IRS Tax Lien - Owing the Government

An IRS tax lien disables a person’s ability to make large purchases because that person is still in debt to the government. The IRS notifies all your creditors about your credit standing while the lien is still in place. They have the priority in getting paid from the sale of any property that you have, including your house, car or boat. If one refuses to pay taxes which one owes, an IRS tax lien enables the government to make a public or private sale of your property or assets. In addition, even if one has paid a tax lien, it will still be a part of one’s credit history and will reflect one’s ability to pay in case one decides to borrow, rent or seek employment.

County Tax Lien - Government Income

When a county tax lien is imposed on a property, it ceases to be a property of the individual. When it is sold, the income derived from such sale is used to fully pay the taxes due to the government before the owner benefits from the sale. However, laws pertaining to these liens vary from state to state. An unpaid tax lien warrants the inclusion of the property in a list of properties to be auctioned. In some states, the owner may save the property through payment of back taxes even up to the last minute without further penalty while other states require otherwise.

Written by Melanie Gray

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