State Tax Lien Statute of Limitations In California — Explained
Consider this, you have property: a vehicle or a house that you want to sell, but right before it goes on the market, your agent calls you, informing you that the state has placed a lien on your home. This lien, thus, prevents you from selling the item. As you begin to ponder what to do about the situation, your research reveals that you can go about this situation in two different ways.
You can either pay the amount in full or wait for the statute of limitations to pass. The only issue is you need the property gone. So how long is a , and can you wait that long? Let DoNotPay worry about that for you.
What Is a Tax Lien?
A state tax lien is a legal tool the state government uses to ensure a debtor pays unpaid back taxes. The government can put a lien on a property when its owner has payment delinquencies on property or income taxes.
A tax lien gives a state government a legal claim on investment accounts, vehicles, and real estate. Failure to pay taxes, the state can exercise the lien, seize the property, and auction it off to recoup the unpaid taxes or until an appropriate solution is reached.
Before the state issues a Notice of State Tax Lien, it will take several steps to reach you and give you enough time to respond. These steps include:
- Assessing your tax liabilities.
- Sending a bill for taxes due.
- Allowing a 35-day waiting period to give you time to settle the debt or come to an arrangement about it.
Failure to respond, the state will issue a Notice of State Tax Lien against you. The is usually four years from when you filed your tax return. The four-year period allows the IRS to assess any additional unfulfilled tax obligations against you.
How To Remove a Lien
If a state tax lien has been placed against you, it's best to take the necessary steps to ensure it is removed as soon as possible. Some of the ways you can get the state to remove the tax lien are by:
|Ideally, pay off the debt||If you can, pay off your tax debt and get proof that the lien has been released before you apply for a mortgage. Depending on the amount you owe, it might make sense to put off buying a house for a bit while you focus on your back taxes.|
|Wait out the statute of limitation||If there isn’t an urgency you can choose to wait for the California state tax lien statute of limitation to run out|
|Set up a payment plan||If you can't pay off your tax debt in a reasonable amount of time, you'll need to set up a payment plan with the IRS. This will show that you're in better financial standing than if you have unpaid taxes otherwise.|
|Improve your financial situation||Before committing to a mortgage, make sure you've fixed whatever financial problem caused you to owe taxes in the first place. Adjust your withholding, make sure you're setting aside the right amount for self-employment taxes or take whatever other steps apply to your situation so you can avoid getting into more debt.|
|Make payments for at least a year||You'll have the best results with your mortgage application if you make on-time payments on your payment plan for at least a year.|
What Does a Notice of Transfer and Release of Liability Do?
When you want to sell your vehicle in California, you'll have to fill and file a Notice of Transfer and Release of Liability. This form essentially informs the DMV that the car is no longer under your ownership. It also informs the government that you can't be held responsible for any legal violations that the vehicle incurs. You can only file the notice before the California state tax lien statute of limitation expires.
How to Check if You Have a State Tax Lien in California
When checking whether you have a state tax lien in California or not, you need to provide:
- Your full name
- Social Security Number
- The date you last filed your tax returns
The process is available online, and the search is free. You may have to part with a small fee if you want to make copies of the document. You can check if you have a lien before the California state tax lien statute of limitations expires.
How to Get a Tax Lien Release Form in California
A tax lien release form is used to remove a lien filed against you by the state. The claimant will use this form to prove that the debtor is satisfied with their debt. You can also get a tax lien release form based on settlements, legal controversies, or after the California state tax lien statute of limitation expires.
To get your release form, you need to:
- Visit the County Recorder's office.
- Request a release form and fill in your contact information.
- Submit and wait.
Remove a Lien With DoNotPay
While you can let the California state tax lien statute of limitations expire, having to wait that long can affect your sale and have other effects, such as barring you from getting a loan. Luckily DoNotPay can help.
DoNotPay can collect all the relevant information that will help your lien situation. We can also send the state of California a letter asking them to renegotiate the terms of your debt based on your needs and income. This way, you can put this lien situation to rest and go on with your life.
The process takes only three clicks, and you're done. All you need to do is:
- Look for the 'Remove My Lien' service on DoNotPay.
- Run the product on DoNotPay.
- Tell us more about the state tax lien.
And you're done. It's that simple.
DoNotPay Works Across the Board
With DoNotPay, you no longer have to wait for the California state tax lien statute of limitations to run out. You can get your state tax lien removed and also access similar services, including:
- Selling your car with a lien
- Removing the state tax lien from all public records
- Removing a lien on your property
- Learning more about the lien release on your car
What Else Can DoNotPay Do?
As you work on getting your lien situation fixed before the California state tax lien statute of limitation runs out, you can access various other services on the DoNotPay app, including:
- Suing anyone in small claims court
- Skipping customer service phone queues
- Closing bank accounts you no longer use
So what are you waiting for? Join DoNotPay and start reaping the benefits.