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A closer look at the enforcement options Maryland uses to collect tax debt - III

In a series of ongoing posts, our blog has been examining how it's not just the Internal Revenue Service that has a host of collection options at its disposal, but also the Comptroller of Maryland. To that end, we've been exploring just how deep the agency's toolbox is, with those who have not made or are unable to make payment arrangements facing everything from interest and penalty charges to salary liens.

We'll conclude this discussion in today's post, examining some of the more serious measures that the Comptroller's Office will not hesitate to take to collect past-due taxes.

Tax liens

A tax lien is essentially a claim placed on an individual's property in the event of nonpayment that is filed with the clerk of the circuit court in which the taxpayer's business or home is located .

The filing of a tax lien does not mean that the property to which it is attached will be seized. Rather, it serves as notice that the state is at the head of the line should creditors come calling.

The filing of a tax lien will not only prevent the sale of the asset to which it has attached, but also make it difficult for the taxpayer to secure new credit or maintain existing credit. That's because the tax lien will be reported to the credit reporting agencies by the Comptroller's Office.

When a tax lien is paid, the taxpayer will be given a certified copy of the release that will also be provided to the credit reporting companies by the Comptroller's Office. However, if the taxpayer needs the matter handled expeditiously, he or she may secure the certified copy and contact the credit reporting agencies on their own.

Asset attachment  

While the Comptroller's Office can file tax liens, it's also vested with the authority to attach (i.e., seize) assets, including vehicles, cash on the premises, inventory, real property and, of course, bank accounts.

Caught in the Web

With everything else that can result from unpaid tax debt, the idea of having your name or the name of your business published on the internet for everyone to see might not seem like cause for concern. However, this sort of public shaming can take a much bigger toll than most people anticipate.

The good news is that if your name is published, it will be removed upon payment of the delinquent tax debt and/or the making of payment arrangements.

Here's hoping the foregoing discussion has proven helpful and not too alarming. Indeed, our primary purpose has been to help people better understand what they are up against and to reinforce how important it is to seek the necessary assistance.

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