Taxes are used by the government in order to pay for community services. However, if taxpayers become neglectful on their income tax bills and property taxes, the government will not have the money it requires to provide for these services. So as to recoup the loss, the government will then place a lien on the taxpayer’s personal property and they can even sell it.

Local taxing authorities can only place a tax lien on the property when the tax is due. But the federal government has more leeway and can seize any personal property for the amount due on the unpaid tax bill. The feds can also lien a property that he may purchase in the future if the tax bill is still unpaid.

Once the real estate and personal property have been liened, the government can then offer these things at auction so as to recoup the lost revenue. For smaller items like cars, boats, etc., the auctions are conducted in traditional bidding process, having the buyers bid against each other.

On the other hand, sales on properties are handled a little differently. Though there may be some deed sales that offer outright selling of the property, the most popular tax lien sale of properties are in the forms of tax lien certificates. This lien certificate allows the taxpayer more time to pay up their debt by permitting a third party investor to pay for the tax debts for the taxpayer, with a promise of reimbursing their investment with an interest within a specific time.

Federal tax liens are imposed upon all the current property when one fails to pay the yearly IRS tax bill. These will remain intact until the tax debt which includes the interest and penalties are fully paid.

So as to have federal tax liens released, you have to get the current payoff amount. You can get a formal letter which states the amount through calling IRS at 1-800-913-6050 and inquiring about the payoff amount. When the total amount has been given, expect to receive a letter that will sent to you as total proof.

When the tax lien debt has been fulfilled, you can then file a Request for Release of Federal Tax Lien with the IRS. If you’re not able to, this can result with a tax lien remaining intact for more or less ten years. Just to note, this is not the government’s responsibility to release a federal tax lien automatically after it has been fully paid. It is your job as a taxpayer to do this.

When you have done filing for the correct paperwork, this would take around 30 days for the federal government to file a Release of Notice of Federal Tax Lien. Payment can then be made in check, cash, by approved adjustment, or even by submitting a bond which will guarantee payment within an assigned schedule.

When the IRS neglects releasing a Notice of Federal Tax Lien, the taxpayer can then sue the federal government. Take note though, it is possible that IRS employees can’t be sued even for the damages they caused by their negligence.

Buying tax lien certificates is definitely considered a risk-free investment because the investor will recover his initial cash disbursement along with interest in just a short period, or gain ownership of the property and can then sell it at market value.

Even though the risk for investors is minimum, there are still precautions that should not be overlooked to ensure the investor can really make money when purchasing tax liens. Here are some tips when buying tax lien certificates.

1.) Check the properties for auctions first. A good investor takes time to research the properties prior to the auction sale to ascertain that the property he is to bid on is indeed profitable before purchasing its tax lien. Although most of the properties auctioned are relatively cheaper than buying them somewhere else, there have been cases of landowners who allow for their parcels to be auctioned just to get away from the tax burden of unusable properties.

During auction, they seldom present any information about the properties to the prospective buyers. It is important to check that the property you are planning to buy is in good shape; is situated in an area that warrantees resale; and is usable. This will help in assuring a profitable investment of money and time.

2.) Understand the Tax Lien Purchasing Process. Every state and county has their unique laws in regards to buying tax lien certificates. It is crucial to realize that buying a tax lien certificate is not actually purchasing the property outright, but it is more of loaning the property owner the money to pay back the taxes and maybe save the property.

3.) Know The Auction Process. Most counties hold tax lien auctions a couple of times a year to release the liened properties and recover the lost tax revenue. The process starts by having a list of guaranteed properties that the local tax office will provide just weeks ahead of the sale, thus providing potential buyers the chance to decide which tax lien certificates to bid on to.

Bidders who have demonstrated that they do have cash on hand or a certified bank draft are then given a bidding number before the auction. Unlike the usual auctions where highest bidders wins, tax lien buyers usually bid on the lowest interest rate that they are amenable to buy the lien certificate. Getting a very low interest rate will issue a low return investment profit if the landholder does repurchase the tax lien certificate. Now if the owner neglects to pay the tax lien certificate in a specific period of time, the investor will then be given ownership of the said property for the cost of the taxes that are due and will then have the full rights of selling it at higher profit.

Buying tax lien certificates is a reasonably simple way to invest in real estate. With research, bidders with adequate capital on hand at auctions tend to bring in a good profit on the tax lien certificates acquired.

Buying federal tax liens is a common investment trend. Where do you acquire a federal tax liens search options to look for investments that are available?

Today’s tax lien investors usually rely on the internet to do a federal tax lien search. They also go with search companies to find tax liens that are profitable.

To find free listings of federal tax liens in a specific location, it is recommended to refer to Paragraph 38160-205 of the CCH Standard Federal Tax Reporter which is an IRS chart. Some of the best places to find tax lien lists are in these following websites:

*www.accuprint.com

*www.lexis.com

*www.knowx.com

*www.autotrack.com

When you get a fine list to look for tax liens, here are some useful ways in making the work easier:

*List a name in any particular order.

*To find a specific property in the database, it is not required to put in both the first and last names.

*Similar names can be found automatically.

*Don’t enter partial characters.

*When looking for hyphenated names, just remember that the search engine will find matches with all of the three terms.

*You don’t have to put in commas or periods.

*Look for numbers the same way it is written in the case files. No spaces in between characters.

*Pick out the state which you find interested. Choose “all states” if you have not decided on a specific state. Results are sorted alphabetically when opting for the all-states search technique.

Every state in the country has its set of taxes due which helps in paying for the community services. State tax lien certificates also give the state government the option of placing liens on other personal property. But these personal properties are commonly sold outright at auction unlike tax lien certificate sales for large real estate parcels.

Many states sell tax lien certificates at large auctions run by the state monthly or quarterly or just rely on counties to conduct the sales for the properties within jurisdictions. County tax offices can provide lists of available properties while some municipalities offer internet search services that can supply the list. There are also national listings that can be made available for purchase by large database companies.

Purchasing state tax lien certificates “over the counter” is also made possible by bypassing the public auction process of sale. This is commonly allowed in counties with not so many properties available; where auctions are not that profitable in the past; or properties that have been offered at auction without interest.

Whenever a tax lien is charged on a personal property, the authority who filed the lien should have the tax lien records usable to the public. No one should be refused access to the records information which includes the property type that is being liened; the liened property’s address; the current owner’s name; the tax due amount; and the auction date lien sale.

The federal tax lien record data is easier to find since these are maintained in modern government facilities, using advanced categorization sources. Most of the country’s state governments have committed tax lien offices in the capitol building. It is here investors may sort through the state tax lien records. Investors can fully research properties either by employing state databases or by their own.

One good example would be the CCH Standard Federal Tax Reporter which is the perfect source for searching tax lien records in specific areas. It is a publication that is federally-produced which contains lists of tax liens filed by every location.

There are also others who pay just to join for-profit search engines. These useful databases range from $20-$100 a month. These databases are a mix of hundreds of free state government listings that normally involves exploring individually.

These are the most common options when searching for federal tax lien records:

*County

*State

*Geographic area

*Address

*Type of property

*Owner’s name

*Date of sale

*And more

Many people find ways to generate more income. And one of these easy ways for them is investing in tax lien certificates. Different from house flipping, which demands the investor to front initial buying and reconstructing costs – tax lien investment may generate lower initial earnings on some buys, but it is definitely a risk-free investment opportunity.

Investing in tax lien certificates is totally different as buying the property instantly. When buying a tax lien certificate, the investor is paying the outstanding tax bill at the auction for the landowner, with the promise of being paid back, in a timely manner – of course, with an interest.

If the landowner can acquire the funds necessary to purchase the lien back, the investor not only helped a landowner save his property from foreclosure, he also makes a small profit on the interest the transaction yields. And if, the property owner neglects to pay the lien certificate owner back within the specified schedule, then the lien owner may take possession of the property and either sell it during an auction; do some fixing and upgrades and sell it on the real estate market; or just sell it as is to a real estate investor.

Getting property in this way is risk-free considering that many of those tax lien certificates are bought for a fraction of the value of the property.

Here are things that you should check out for before purchasing tax lien certificates:

*Make certain that the property is worth more than the taxes owed. Inspect the property and check to make sure it is a profitable buy.

*Have cash on hand when going to auctions. Tax lien auctions need the full purchase price in cash or if not, a certified bank draft.

*Know the rules of purchasing lien certificates in a specific county. Remember, every county has their own individual laws determining the sale of tax lien certificates and the acquisition of property.

Both large and small capitalists have considered Real Estate as one of the safest and best investment opportunities. Purchasing properties for a fraction of their value is the trick to making money in a downward spiraling market used by investors. How? By investing in tax lien sales, that is.

There are some properties that can be acquired for a few thousand dollars, regardless of how much it is worth while paying off the tax liens, while other properties can cost more than a house or land. Smart investors take the time to research and study each property carefully before the sale date.

Tax lien sales are commonly conducted at public auctions once or several times a year, depending on the county or state and the count of properties the government has seized yearly for back taxes. Large urban areas usually hold monthly auctions while smaller rural places may have them once a year.

The two types of tax lien sales auction are tax lien certificates and tax lien deeds. Both of these types are actually very profitable for investors with the knowledge, experience, and the cash to invest.

Buying tax lien certificates or tax deeds at auctions is different from bidding at auctions. The bidding system can vary from county to county or state to state and is dependent on their unique rules regarding tax lien sales. Some may have strict bidding processes while other counties follow a more freeform procedure.

Here are some useful tips in bidding for tax liens during auction sales:

Bid Down the Interest. This method is used when purchasing tax lien certificates. Different from the traditional auction, bidding down the interest method allows bidders to choose how low the interest rate they’re amenable to accept prior to purchasing the tax lien.

Profit margins are based on the interest which can be collected when the property owner repurchases the lien certificate during grace period. Due to this, investors need to make sure not to bid too low that will eliminate any real profit.

Bid Down the Ownership. In Iowa, investors can be offered the chance to bid the ownership down when purchasing tax lien certificates at auction. This is not actually a favorable method of bidding for many investors. As bidding gets lower, the investor will get less percentage of the property and profits thus making it the most unsuitable of all the bidding methods.

Random Selection. There are some counties that prefer the random selection method when selling tax liens as it looks as it is the cleanest method to offer investors the chance at the properties available for sale. In this process, every bidder is given a particular number and then a computer draws a number for every property that will be in auction. The first bidder number that has been drawn has the opportunity to accept or deny the price of the taxes due. If the bidder denies, the next number will then be chosen and so it continues.

Premium Bidding. This method is more related to the traditional auction. The tax lien certificates are sold to the highest bid offering or the most premium over the lien amount. Some states or counties, however, don’t permit interest to accrue on “overage” but only to the original lien amount.

Purchasing Off The Shelf. There are areas where you can purchase tax liens directly from the tax collector in a specific county. This usually happens with tax liens that have already been auctioned but no one bought. It is important to look into the property before buying.

What is an Attorney’s Lien? It is a judgement placed on an individual property in order to recover the lost revenue from failure of paying a bill or taxes. And if the debt is still unpaid, the lien holder or the Attorney has the power to liquidate the lien asset to raise the funds being owed.

Now there are two types of attorney’s liens: A charging lien and a retaining lien.

A charging lien is a means for an attorney to claim the money incurred in a specific action suit. The attorney has the right to a percentage of any judgment that has been acquired for the client through the lawyer’s services.

Since there are judgments that can be large, it is common for the lawyer to file a tax lien against it before the money is granted so as to ensure that they will receive the amount of money they’re due. This also grants the attorney to receive his part ahead of the client.

Meanwhile, a retaining lien allows a lawyer to claim all of the property that a client may be given possession of on the course of the lawsuit. This type of attorney\’s lien is common in high-profile divorces where money, real estate, and other worthy personal belongings are awarded to a client. Until the attorney is paid fully for his services, he may keep a portion of the property to pay for the services following the retaining tax lien laws of that particular state where he is licensed.

The federal government takes their job seriously – collecting all personal, business, and even property taxes that are owed to them. Failure to pay the due taxes may result in a Government Tax Lien on personal properties including real estate owned by the neglectful taxpayer, as well as purchases in the next few months.

Once tax debts are paid, federal tax lien are then likely released within 30 days after the payment has been made and needed paperwork filed; the debt satisfied; or the debtor submitting a bond to the IRS which guarantees payment.

After their debt has been satisfied, the taxpayer must then file a Request for Release of Federal Tax Lien form. When the taxpayer is not able to file the form, the IRS will then release the tax lien which is around 10 years.

If a taxpayer thinks that the tax lien has been incorrectly filed, they can file an appeal with the Office of Appeals. The taxpayer can request hearing if:

* All of the taxes due are already paid before the lien was filed.
* The tax due was evaluated and the tax lien was filed while you were in bankruptcy.
* A procedural error in the assessment.
* The time expired in collecting the tax.
* You were not given the opportunity to file a dispute against the assessed liability.
* You want to discuss the collection options.
* You want to attain spousal defenses.

After the due process hearing, the IRS Office of Appeals will then issue its decision. You do have the right to file an appeal a second time along with a judicial review in the court of proper jurisdiction.

IRS tax liens are issued by The Internal Revenue Service, a part of the US Department of Treasury. The IRS job is to collect all federal tax revenue from individuals and businesses in the United States. When an individual neglects to pay his annual tax bill, the IRS can put a tax lien on his real estate and personal property he owns until the debt is fully paid.

With debts from the IRS, it can result in the personal property loss including the house, car, and other items of worth. Tax liens give the government claim to the property to recover from the government’s loss. A federal tax lien can be filed if:

*The IRS assesses the liability.

*Demand for payment has been sent and ignored.

*Payment has not been received within the 10 days of the Notice for Demand of Payment being received.

Once the government accomplishes the initial requirement to give notice to the taxpayer about their debt and payment has not been received, the IRS can then place a tax lien on all properties for the tax debt amount with penalties and interest. Once a lien is filed, all the other creditors will then be notified since federal tax liens take precedence over others in most circumstances.

If the taxpayer dissents with the IRS notice, they have the chance to have an appeal on the decision through Collection Due Process at a hearing in the Office of Appeals of the IRS. During hearing, the taxpayer will have to prove the following before the IRS can absolve the lien:

*All taxes were paid before the lien filing.

*Tax lien was filed while the taxpayer was in a bankrupt state.

*A procedural error on the tax amount owed.

*The taxpayer wasn’t given a chance to dispute the liability.

*Discuss collection options.

*Make spousal defenses.

The IRS Office of Appeals will have to determine whether the tax lien filing was valid during the hearing. If the taxpayer does not agree with the Appeals Office decision, he has 30 days to appeal once more and can then have a judicial review in the proper jurisdiction court.

To recoup the lost tax revenue because of delinquent taxes, the county tax office has the right to place a tax lien on the property and sell it. Laws and processes regarding tax lien sales may vary in different states and counties. It is recommended to find out an area’s tax lien rules by visiting the county courthouse or tax office for detailed information. They clearly explain each procedure for buyers and homeowners.

Many counties have their tax lien sales at a pre-disclosed like a county court house. Large municipalities hold sales several times and while some may hold just one tax lien auction sale a year.

When an investor finds out the schedule for the next sale, he may get a list of properties from the county tax office. Just remember that there will not be detailed information about the listed properties during auction time. There are even parcels that are brought for bid with a little more than just a lot number. It is therefore recommended to check out the listed properties first before going to the auction to check if the property you plan to bid on to is actually profitable.

Taxes provide the government a way to get the needed funds to pay for the services that all the people in the county uses and enjoys. Without these taxes, a lot of the services the people depends on would not be available because of the lack of money to support the fees.

When a tax lien has been placed on a property, it will then be listed at the county’s next public tax lien auction. The taxing authority may be able to get the lost revenue from delinquent taxes by either offering the tax lien for sale as a lien certificate or as a tax lien deed.

Tax lien certificates give the property owner more time to be able to find funds needed to keep the property, by permitting another outside investor to pay for the tax debt, with understanding that the owner of the property will have to repay this debt with an interest at a scheduled time. If the property owner fails to repay the investor on that specified time, the ownership of the property will then be transferred to the real estate investor.

Tax lien deed offers the actual property in auction, with no waiting period for the highest bidder to take ownership of the property.

A lot of homeowners find themselves in severe legal problem after a major redevelopment, and it is because they neglected having tax lien wavers signed by every sub-contractor who was employed to work on the individual aspects of the work before final payment. Though a contractor was only on-site for a couple of hours, it is still crucial to have them sign a tax lien waver prior to releasing the final payment to the general contractor who is in charge.

Now, having tax lien wavers protect you from having a lien placed on your property because of non-payment of subcontractors by your general contractor – even if you have papers to prove that you have already paid him in full for all the services rendered.

Make sure that all sub-contractors who has worked in your home has signed before releasing those payments.

Usually, the main contractor hires the subcontractors and  he pays them from the fee he charges the householder. Do take note that if the general contractor neglects to pay the subcontractors in time, problems will arise. Without a signed tax lien waver from each of the independent worker, the homeowner will remain responsible for the payment, no matter who they have already paid for those services.

So what should a tax lien waver include? Usually, the following are what composes a waiver:

*Homeowner’s name

*Contractor’s name, address, and telephone number

*A complete description of work. It includes the final state of the house at the completion of the job and a listing of what materials that should be removed from the premises.

*Work status

*Signed and dated. The contractor should print and sign his name on both of your copies.

*Witness signature. This is actually optional but it would be preferable to have this.

Tax lien laws were constituted as a means to protect labor subcontractors and providers from dishonest general contractors who could get full payment for all the services from the owner of the property. But neglect to compensate for the outside services or supplies he accosted to finish the task.

The tax lien law allows for an unpaid worker to pressure the home or landowner to pay for the services regardless of whether or not he has already compensated the contractor for the job that has been completed.

In the case that the homeowner declines to pay up for the services provided after the general contractor has neglected to pay for the invoices, the subcontractor can then put a tax lien on the said property to assure later payment should the specific property be mortgaged or sold. However, this is not an assurance of immediate payment, but does ensure that the landowner will never be able to attain a profit on the property without first paying up for the tax lien in full.

Tax lien laws variegate from state to state and should be thoroughly explored before seeking to place a tax lien on a particular property. Now, most states have rigorous timelines in reference to tax liens. So, it is most effective to file a tax lien right away even if you’re in talks with the homeowner concerning payments. Tax liens can be easily removed but can’t be imposed after the deadline, regardless what the circumstances might be.

One thing to be wary about when beginning at a fresh work place. Homeowners who realize their financial obligation when addressing with general contractors sometimes call for all subcontractors to sign tax lien releases before the work commencement. Or when making a final payment so as to free them of payment responsibility concerning subcontractors. Just keep in mind that if you sign this waiver, you can obtain payment through the general contractor – tax lien laws no longer apply then.

Tax lien laws are not automatic so that means there are processes the laborer must do. Although lien law rules may vary from area to area, one must be aware of the following:

*Tax lien laws differ often dramatically when managing private projects vs. public ones.

*Notify the homeowner that you’re acting on the project with a pre-lien form.

*Place a tax lien within specified deadlines.

The following are few safeguards every subcontractor should apply to assure that they are compensated in a timely manner and prepare to make suitable action when they aren’t:

*Keep pre-lien forms on file for fast access.

*When signing a work contract, send a decently filled out pre-lien form to the homeowner thru mail.

*Watch lien deadlines carefully to check that you are able to make a claim legally.

Tax lien certificates are used by real estate investors to make large scale profits by taking possession of property at a fraction of its worth. Or bid low profit loans to assist householders hold on to their property by giving them additional time to conjure up funds needed to pay off the tax debt.

When property taxes have been neglected for a certain period, the county has the right to seize the said property and can either sell it or have it auctioned.

Some municipality governments confiscate properties in the first year of delinquency thus making larger profit, while other counties allow years of unpaid taxes to pile up before making any action. The back taxes owed have a distinguishable effect on the landowners power to pay up the back taxes and of course the investors chance to make profit.

When buying a tax lien certificate, it is crucial that one must understand that he is not actually buying the property. He is lending the householder money to pay the back taxes and with of course the assurance of paying back the loan with the specified amount of interest.

Investing in tax liens is absolutely safe and simple especially to those who fully understand the process.

Tax liens are manners to lawfully ensure that a person, business, or loaner will be paid off for a debt. This is done by putting a limitation on the debtor’s property, which restrains them from reassigning its title or employing it as collateral to incur additional financing.

Tax liens can be placed on a type of personal property of realty. One of the most usual liens nowadays is mortgage. Other kinds of liens have their own rules and deadlines concerning filing, and may be different from state to state or even county to county.

The two types of liens are particular liens and general liens.

Particular liens come up when someone claims a right to keep a property in respect to the spent cash and labor on the specific property. This lien may be made out in any of the following two ways: first, by express contract wherein there is an implied contract as in the usage of trade; second, by legal arrangement of the two parties when the contractor completes the contracted work on the property or goods that have been relieved.

Now general liens will be issued when there is an agreement of the two parties, by general usage or trade, or by particular trade or usage.

Additionally, almost all liens are separated into two groups: first is the legal and federal lien which may be enforced by law and second, the equity liens which are valid only in the court of equity.

To make a valid lien, it is crucial to ascertain that the party is required to hold absolute ownership of the property. The person claiming the lien has the authority to do so and that the lien is placed in purpose of an arrangement of payment created by the two parties.

Liens may be accompanied by personal property or real estate for either of the following reasons: to pay for the tax debt; to pay for the labor services that have been rendered and the supplies used; and for the mortgages.

A tax lien may be waived once the debt is either fully paid or on arrangement between both parties. When tax liens go unpaid, the tax lien holder may demand immediate payment, or may take possession of the property in accord with the local lien laws. Liens can also be sold at an auction for the price of the tax lien, regardless of the property’s value, and to a third-party investor.

A lot of people who may be interested on investing in lien certificates always ask this question, are these safe?

Tax Lien certificates are made so that the government can collect back taxes on a property owner without taking ownership of their property. These certificates work as a middle man for the government which allows them to recuperate lost tax revenue easily.

These lien certificates can be laid on the owner of the property by the state or county taxing authority for the nonpayment of real estate taxes, or the federal government for the non-payment of personal profit taxes.

Now when a tax lien is filed on a person’s property, they have no control with the property until the lien has been fully paid. And this includes transferring the title as a gift, or using the said property as collateral for mortgage.

Once a tax lien has been filed, this can be offered for sale at a county, state, or a federal auction. There are also cases wherein the tax liens are offered over-the-counter done by the taxing authority. Prospective buyers can then bid on the lowest amount of interest they’re amenable to accept or they will be offered the opportunity to buy individual lien certificates randomly by drawing lots.

When the tax lien certificate is bought, the investor will then pay the full tax bill for the householder thus giving him a set amount of period to pay back the debt with the interest specified.  If the debt is paid on time, the tax lien will then be released and the landowner will retain ownership. On the other hand, if the lien certificate will not be fully paid on a specific time frame, the said property’s deed will then be reassigned to the investor and this will give him full ownership rights of the property.

And since the government completely controls the process, these tax certificates are indeed extremely safe and profitable. Contact your county for more details and information on tax lien certificate sale process in your area.