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drewr13jn6
Posted: Fri 8:47, 13 May 2011
Post subject: Nike Dunks Low What to Expect when you Receive a N
>What to Expect when you Receive a Notice of Federal Tax Lien
If you fall too far behind in paying your taxes
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, a federal tax lien may be filed. A notice of federal tax lien is at the very base of enforced collection activities by the Internal Revenue Service. Once the initial shock of receiving such a notice subsides, clients need legal representation from a qualified tax attorney before proceeding further. Navigating this area requires an understanding of the process. The most important things to learn include
How the lien arises
Types property that can be attached
Duration of the lien
Priority of the lien over creditors and
How the lien can be removed.
IRS Takes Priority
The notice of federal tax lien stems from failure to pay any tax after the IRS demands payment. The lien is retroactive to the date of assessment
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, and it remains in force until the debt is paid or becomes unenforceable due to the statute of limitations. The actual filing of the notice is not required. The real significance behind filing it is the establishment of the IRS’s priority over other claimants to the taxpayer’s property. For example, if the taxpayer owes several thousand dollars on auto loans, credit card debt or some other type of unsecured debt, those take a back seat to paying off the federal tax lien.
IRS Tax Codes
The Internal Revenue Code gets very specific about how and where to file a notice of federal tax lien against both real and personal property. For real property, the notice should be filed in the office in the state where the property is located. In most states this means the notice is filed with the land records in the county where the land lies. The business property of a corporation or partnership is the place where the principal office is located. A notice for a taxpayer living abroad should be filed with the Recorder of Deeds for the District of Columbia.
Sometimes a lien must be refiled to remove any doubt over whether the lien is still enforceable when the notice shows the assessment is more than 10 years old. In this case, the IRS must file the notice of federal tax lien within a one-year period ending 10 years and 30 days after the date of the assessment. Sometimes taxpayers will look for a way out, pointing out minor errors in the information on tax lien notices in the hopes that such mistakes would invalidate the lien. For example, if something other than the taxpayer's legal name appears on the notice (such as a nickname), the question is whether it is sufficient to alert another creditor of the existence of the lien. Some courts have ruled that a minor misspelling voids the entire notice.
Confusing Language
The scope of a notice of a tax lien is all-inclusive. To avoid confusion, the wording of the lien states it is attached to “ all property and rights to property” of the individual liable for the tax. Some interpret this broad, sweeping language to include real
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, personal and intangible property of widely varying natures, future interests, and even property the taxpayer acquires after the lien has come into existence. In Aquiline vs. the Supreme Court maintained that the key point was whether or not, and to what extent, the taxpayer had property or rights to property to which the tax lien could attach. The answer to that lies in state law, which controls the nature of the taxpayer’s legal interest. However, once the taxpayer’s property interest has been established under state law, federal law then determines the consequences of the existence of the notice of federal tax lien.
IRS Tax Attorney
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