How Long Are State Tax Liens in Maryland Good For?
A tax lien is a legal claim by the government on a property due to unpaid taxes. In Maryland, the state government has the authority to place tax liens on properties when individuals or businesses fail to pay their state taxes. If you find yourself in this situation, it is important to understand how long these liens are valid and what options you have for resolving them.
In Maryland, the duration of a state tax lien is determined by the type of taxes owed. Generally, the statute of limitations for state tax liens is 20 years. This means that the lien will remain on the property for a maximum of 20 years, during which the government can take legal action to collect the unpaid taxes. However, there are certain circumstances that can extend the duration of the lien.
If the state government takes legal action to enforce the tax lien, such as filing a lawsuit or obtaining a judgment, the statute of limitations is extended to 12 years from the date of the court action. This means that if the government takes legal action against you, the lien can remain on your property for up to 12 years from that point.
It is essential to note that even if the statute of limitations expires, the lien does not automatically disappear. The government can still enforce the lien and attempt to collect the unpaid taxes. Additionally, the lien may negatively impact your ability to sell or refinance your property until it is resolved.
Resolving a state tax lien in Maryland requires taking proactive steps to address the outstanding tax debt. Here are some options available to individuals or businesses with tax liens:
1. Pay the Debt in Full: The most straightforward way to resolve a state tax lien is to pay the debt in full. This will satisfy the government’s claim and remove the lien from your property. If you are unable to pay the full amount upfront, you may be able to negotiate a payment plan with the Maryland Comptroller’s Office.
2. Offer in Compromise: In some cases, the government may be willing to accept a reduced payment to settle the tax debt. This option, known as an offer in compromise, requires demonstrating your inability to pay the full amount and providing supporting documentation. If the offer is accepted, the lien will be released upon payment of the agreed-upon amount.
3. Bankruptcy: Filing for bankruptcy can provide temporary relief from the enforcement of a state tax lien. However, it is crucial to consult with a bankruptcy attorney to understand the implications and determine if this is the right option for your situation.
4. Release of Lien: If you believe that the tax lien was filed in error or that you have resolved the underlying tax debt, you can request a release of lien from the Maryland Comptroller’s Office. This involves providing evidence to support your claim and may require working with a tax professional to navigate the process.
Q: Can a state tax lien be removed from my credit report?
A: Yes, once the tax debt is resolved, you can request that the credit reporting agencies remove the lien from your credit report. However, this process may take time, and it is recommended to monitor your credit report regularly to ensure its accuracy.
Q: Can the government seize my property if I have a tax lien?
A: Yes, if you fail to address the tax lien, the government can seize and sell your property to satisfy the unpaid taxes. It is important to take prompt action to resolve the lien and avoid potential property loss.
Q: Can I sell my property with a state tax lien?
A: Selling a property with a state tax lien can be challenging, as the lien creates a cloud on the title. However, it is possible to sell the property by either paying off the lien from the sale proceeds or negotiating with the government to release the lien.
In conclusion, state tax liens in Maryland are generally valid for up to 20 years, with the possibility of extension if legal action is taken. Resolving a tax lien requires proactive steps, such as paying the debt in full, negotiating an offer in compromise, or seeking a release of the lien. It is essential to address the lien promptly to avoid potential property loss and credit implications.