What are tax liens? They are documents filed with the county government that announces to the general public that certain people owe the federal government unpaid taxes.
Liens essentially protect the government’s right to collect the money it is owed. Unfortunately, these can negatively impact the debtors’ credit report and financial health, affecting their ability to get a credit card, find employment, rent a home, or buy real estate property.
Tax law distinguishes the legal description of a tax lien from that of a tax levy although both are methods of debt collection. A tax lien is documenting on public record that you owe the government while a levy is acting on the debt through bank account seizure or wage garnishment.
If you have a tax lien, it would definitely be advisable that you resolve it as soon as possible. You should talk to an experienced tax attorney for legal advice on removing that tax lien.
Arizona Tax Liens
On top of the mark on your record, a federal tax lien can pose more problems. The state of Arizona has a rather unique state law that allows a person to pay somebody else’s unpaid real property tax bill on a property, be it residential or commercial. This, in effect, offers a real estate investment opportunity.
In order to glean some revenue from delinquent property taxes, the county’s treasurers may sell in a public auction the government’s claim to those delinquencies as well as the lien that secures them in tax lien certificates. Tax lien sales usually happen at a set time yearly, for many places, during the winter. The winning bidder gets a certificate. During the tax lien sale, real estate investors bid on “Certificates of Purchase,” documenting the sales of real estate tax liens.
If the delinquent tax remains unpaid by the property owner three years after the sale of its lien, the purchaser or the tax lien certificate holder may file a lawsuit in the Superior Court for the judicial foreclosure of the owner’s right to settle the tax debt and to subsequently obtain the title to the property.
Arizona Tax Lien Removal
If you need to resolve your tax problems, consult an Arizona tax lawyer so you can have your case reviewed. Tax attorneys are used to dealing with complex tax issues and will be able to come up with a solution that suits your situation.
What are your options for resolving your property tax lien?
The Internal Revenue Service isn’t in the habit of settling with taxpayers for minimal amounts if there is no good reason. You have to comply with certain criteria as well as pass multiple levels of review to get the agency to accept your settlement offer. It’s definitely prudent to understand what the possible solutions are for you to be free and clear of that lien. Here are some of them:
- Offer in Compromise
This pennies to the dollar process allows you to settle your debt with the IRS for a reduced amount. You need to show the department of revenue that you really can’t pay the debt now or anytime in the foreseeable future or that paying the total amount will cause you undue hardship.
- Installment Agreement
You can negotiate to pay the IRS in installments. This option will keep the lien in place until you’ve fully paid for your debt.
- Filing Bankruptcy
You can file for bankruptcy, but the tax relief bankruptcies offer is limited. Liens aren’t dischargeable debts so they still need to be paid after a Chapter 7 bankruptcy or be fully repaid through a Chapter 13 payment plan.
Arizona Tax Lien Attorney
Financial problems can be overwhelming. If you are hounded by a tax collector because you’re behind your tax payments or have a lien notice with your name on it, it can be very stressful for you. It is even more so if your lien is up for auction or, worse if there’s already a lien holder intent on tax foreclosure.
In circumstances that call for the resolution of your tax problems, contact us at Pew Law Center for legal assistance and guidance.