Tax collection involves seizing and selling property to recover back taxes. Taxpayers can pay in full, work out a payment plan, or contest the claim. Tax authorities may authorize collection if the taxpayer does not respond to requests or is evading payments. Real estate tax collection can involve buying the tax bill and obtaining title to the property if the taxpayer doesn’t pay. Taxpayers should consult an attorney and work with tax agencies to avoid seizure of property.
Tax collection is the practice of seizing property and selling it to recover back taxes. Tax agency representatives have the legal authority to initiate tax collection when a taxpayer fails to catch up on taxes after receiving a request to do so. It is possible to sell real estate, private property, and commercial property, usually at auction, to satisfy a tax liability. Authorities typically only pursue this measure when more conservative approaches to solving the problem fail, as tax collection requires a lot of administrative energy and time and can be an expensive proposition.
When people start falling behind on income taxes, property taxes, and other types of taxes, the government usually sends out a warning notice. The notice asks the person to pay their taxes and provides information about the estimated balance, including interest. The taxpayer can respond by paying in full, working out a payment plan, or contesting the claim. If the person does not act, the government may send additional warning notices and may consider filing a lien, making it impossible for the taxpayer to legally sell or transfer property until the tax matter is resolved.
Tax authorities may decide to authorize tax collection because a taxpayer does not respond to payment requests, fails to meet payment obligations, or is clearly trying to evade payments. Government representatives will request police assistance in seizing property, taking steps such as changing locks and removing movable property to a secure location. The taxpayer may have the final opportunity to pay the taxes before the property goes up for auction in a forced sale, with the government taking the funds to cover taxes, administrative fees, and interest.
In some regions, real estate tax collection is a two-step process. The person actually buys the tax bill, paying it in full. If the taxpayer pays the bill, with interest, within a set period of time, the buyer gets the money back from him, but if the taxpayer doesn’t, the deed to the property transfers to the buyer. This approach to tax collection provides people with investment opportunities, as they will receive their money with interest or obtain title to their property.
People facing tax proceedings should consult an attorney for assistance. Tax agencies are often willing to work with individuals as long as they contact and provide evidence that they intend to address the tax bill. Silence from a taxpayer can speed up the tax collection process, as authorities may be concerned about attempts to evade payment and hide or destroy property to avoid a government seizure.
Smart Asset.
Protect your devices with Threat Protection by NordVPN
