What is a tax lien?
Liens give the IRS a legal, enforceable claim to your property as security for payment of the tax you owe. [A tax lien is the same concept as a mortgage on a residence. The money borrowed to buy the residence is secured by (or guaranteed by) the mortgage. If you were to default on your mortgage payments, the lender can come take the residence as repayment for the money borrowed.] In a similar manner, if you fail to pay your taxes, the tax liens give the IRS the legal right to take your property. There are two lien terms that cause confusion with many taxpayers: a federal tax lien and a Notice of Federal Tax Lien. According to federal tax laws, a federal tax lien arises automatically when the following three events occur: (1) the IRS assesses your tax liability (usually when you file your tax return or when the IRS files a return for you), (2) the IRS sends you a Notice and Demand for Payment, and (3) you do not pay the full amount within 10 days after the IRS notifies you about the tax
A tax lien is a legal claim the Tax Commission files against your property to secure payment of the taxes you owe. A lien is filed only after all of your opportunities to appeal a tax debt have been exhausted. Its filed at the Secretary of States office as a public record. The tax lien attaches to all property you own in Idaho, including your land, house, and vehicles. With the tax lien in place, the Tax Commission may also issue a warrant to seize your wages, bank accounts, and other assets, if necessary. Contact us if you need more information.
A lien is method by which a lender can secure, restrict the use of, or encumber property if debts owed are not paid in a timely fashion. A tax lien tends to refer to the government’s right to encumber property when taxes owed are not paid. This is slightly different than a tax levy, where the government seizes property and can sell it to pay back taxes. Tax liens are the right for a government to seize property and notification of this right, but the levy refers to actual seizing of property. Though you may often hear of a tax lien in connection with unpaid taxes on property, organizations like the US Internal Revenue Service (IRS) can also use a lien as the beginning process in collecting unpaid income taxes, as can most state tax boards. Essentially the lien can exist against any “present or future property” including income you make. The existence of a lien against present or future property may result, if the taxes remain unpaid, in seizure of any and all assets to recover the tax.
A If a person neglects or refuses to pay a tax administered by the Tax Commission (except for property tax), the tax plus additional penalty and interest is a lien in favor of the state, upon all property and rights to property, both real and personal, belonging to that person. To notify the public of that lien, the Tax Commission may issue a notice (warrant) to the district court and upon docketing (recording) the notice, it becomes a judgment. The judgment is a lien (tax lien) against the person’s property located in the county of the district court the judgment is filed in. The lien is a public document and lists the delinquent taxpayer’s personal and/or business name, the tax type and amount owed at the time the lien is filed. A state tax lien has the same force and effect of a court judgement. A state tax lien, officially called a “Warrant for Delinquent Taxes,” allows your personal property (such as automobiles, business equipment, etc.) and real property to be attached and sold
