A variety of reasons could cause a person in Maryland to fall behind on his or her federal taxes, but the federal government has substantial powers to compel someone to pay. A federal tax lien represents the government's claim on a person's personal or business property, which includes real estate. The Internal Revenue Service takes this step to secure the amount that is owed to them. People that are dealing with this action have some options for managing the consequences and potentially preventing the forced sale of their property.
Maryland residents who are interested in redeeming tax liens on properties in order to secure deeds to them might be interested in a North Carolina case that examined whether local tax liens or federal tax liens are superior. The case involved a property that had both a municipal tax lien as well as a federal lien and separate purchasers under two foreclosure sales.
While the following story doesn't come from here in Maryland, the lessons it teaches about businesses and tax liens are applicable no matter where it originates. A start-up company in San Antonio, called Vysk Communications, has been hit with a tax lien by the Internal Revenue Service. Vysk is a company that produces "privacy" cellphone cases, with the intent of the case being that your microphone can be muffled and your phone's camera can be blocked -- thus preventing proprietary parties or third-parties from accessing private data that is knowingly or unknowingly captured.
The word "process" is boring and dull, and it is meant to make you feel bored. It is a term that no one wants to think about for too long. It's vague and uninteresting -- and yet, in relation to the Internal Revenue Service an tax issues, the word "process" holds significant meaning for taxpayers. IRS processes can actually protect you, John Q. Taxpayer, during any tax collection process or seizure process.
We have written about tax liens before, and today we have an interesting story about this imposing penalty that the Internal Revenue Service can apply to those who run afoul of tax laws. MSNBC has at least six host or pundits right now that are under a tax lien, with two others who left the network recently also under a lien. They include such prominent personalities as Chris Matthews and Al Sharpton.
Imagine that you rack up some debt with a creditor, and as time goes by your creditor expects to be paid back. But after you fail to pay, the creditor grows tired of waiting and informs you that you must comply with the loan agreement. You still refuse to pay.
In mid-September, Grammy award-winning rapper Nelly (Cornell Iral Haynes Jr.) got hit with an IRS tax lien totaling more than $2.4 million. This was preceded by a lien from the Missouri Department of Revenue, although that was for almost $150,000.
If the IRS has put a tax lien on your company, it can be very difficult to continue doing business. You may lose control of your accounts receivable, and suddenly be unable to obtain credit. Your business might not grind to a complete halt, but a tax lien can be a serious drag on your ability to function and grow.
If the IRS accuses you of failing to pay a tax debt, the agency may try to put a tax lien on your property. A lien can cause serious trouble, because it severely restricts your ability to use or transfer your assets, such as real estate or a small business, as you see fit.