Tax Liens, Levis, and Warrants
Tax Liens & Warrants
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After the IRS (i.e., the Federal Government) assesses a tax, issues a notice and demand for payment of the tax, and payment of the tax is not made, a “silent” or “secret” lien exists against the taxpayer. That means any property owned by the taxpayer is encumbered by the IRS lien and generally cannot be sold or transferred without first resolving the IRS lien.
When an NFTL is issued, the taxpayer is provided an opportunity to dispute the IRS lien by requesting a Collection Due Process (CDP) hearing within a specified timeframe. Possible remedies to a federal tax lien filing include the lien being Withdrawn, Satisfied, Discharged, or Subordinated.
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Like the federal tax lien, the New York State Department of Taxation and Finance (DTF) files NYS Tax Warrants against taxpayers who are delinquent with their payment of NYS tax obligations. The NYS Tax Warrant is essentially a judgment filed against the taxpayer and encumbers property owned by the taxpayer including but not limited to Real Estate.
Tax Levies
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When the IRS and/or NYS DTF issues a levy, it means they are taking something from a delinquent taxpayer. The two most common forms of tax levies are wage/income levies and bank levies. In some cases, the IRS and NYS DTF can seize and sell real estate, vehicles, and other property of a delinquent taxpayer in an attempt to satisfy the outstanding tax debt.
The IRS will send a CP504 or another intent to levy before seizing your assets.
Federal lien law is complex and riddled with nuances and possible pitfalls. For those who have been issued an NFTL, it is wise to consult with a competent tax resolution law firm to determine the best course of action to be taken with respect to the federal tax lien.
This communication is Attorney Advertising. It is presented for informational purposes only and does not constitute legal advice. Every legal situation is different, and prior results do not guarantee a similar outcome. This communication does not create an attorney-client relationship between Metuku Law P.C. and the recipient.