It’s scary when you find a tax lien has been levied on your assets. If this is the first time it’s happened to you, you will have many questions. How will this impact your ability to pay your bills? Will someone be coming to take your property away? What are your options?
Tax liens and other tax-related issues can be complicated, and it’s no different in Utah. Whether this is your first time dealing with a problem like this or not, understanding the tax lien process and how it will affect you makes all the difference.
Our tax and accounting specialists can help clear up the mystery of tax liens and help you navigate what’s ahead of you.
Here are some key facts to understanding the basics of tax liens in Utah. Getting familiar with the ins and outs of the process can help you find a foothold during this uncertain time.
Understanding What a Tax Lien Is
First, what exactly is a tax lien? This is a “judgment filed by the Tax Commission against a taxpayer’s real or personal property” when a person has failed to settle their Utah tax balance.
This is a public document that lists everything from the taxpayer’s personal or business name right down to the amount owed. It’s sobering to realize that the Tax Commission can use a lien to take and sell the delinquent taxpayers’ property to satisfy a tax balance. This doesn’t always happen, but it’s their right to do so.
If the Tax Commission has filed a tax lien against you, they will send you a certified Notice of Lien. This lien guarantees that payment to satisfy the tax debt or assets will be seized and sold.
The Tax Lien Process
1. Once the taxpayer receives the demand for payment, the process begins.
2. If the taxpayer cannot satisfy a tax debt or set up a payment plan, the government will place a lien on the person’s assets.
3. The lien covers all the delinquent taxpayers’ assets, including property, vehicles, and securities. Any new assets purchased while the lien is in place will also be included.
4. If the choice is made to file for bankruptcy, this will not wipe out the tax debt. This only applies to federal tax debt.
You can have your lien withdrawn in one of these two ways:
- Satisfying the balance of what is owed, including the penalty and interest.
- If you can prove to the Tax Commission that your lien was an error from the get-go, it may be withdrawn.
Tax Liens And Your Credit Rating
It’s no secret that credit reporting agencies can access county records. This means tax liens will show up on a credit report. This can create a big problem when looking for a loan or trying to sell or refinance a property. Another thing to be aware of is that even after your lien is withdrawn, it will still appear on your credit report as “set aside.”
- If you do not satisfy your tax debt in the state of Utah, a lien will be placed on your assets.
- If the debt is satisfied or an agreement is made with the government for a payment plan, the taxpayer may have the lien removed.
- No attempt to repay the debt will cause the government to seize the taxpayers’ assets and sell them to satisfy the tax debt.
Utah Tax Lien Information
Tax liens are processed electronically, making it easier to view and note active liens online. You can search the Utah Courts website for tax lien cases.
The liens are posted by Tuesday at 1 pm each week and can be downloaded for your viewing and records. The liens are listed by county, with the newest files listed last.
Contact the Tax Commission at 801-297-7703 or 1-800-662-4335 ext. 7703 for more general information.
Let Us Help You
Your bank account won’t be raided, or your paystubs slashed in half if you find yourself with a tax lien. But there is a real possibility of losing your assets if you don’t act. The onus is on you, the taxpayer.
If you find yourself with more questions and would like to discuss your specific tax lien situation, contact one of our experts at AA Tax & Accounting Services. We have the experience and expertise to guide you through the process and get you back on level footing. Contact us. We’re here to help.