A Georgia state tax lien is a legal claim filed by the Georgia Department of Revenue against taxpayers with unpaid state tax debts. Also called a Georgia state tax execution, it attaches to all of your assets, complicating sales, transfers, and borrowing against the asset(s).
If you are subject to a tax lien, it’s important to quickly get informed about what the lien means for you, your legal options, your rights, and how to navigate your situation. Depending on your circumstances, your best bet may be to talk directly to a tax lien attorney about your finances and tax debt.
Key takeaways
- A Georgia tax lien is officially called a state tax execution.
- It attaches to your real and personal property.
- You can sell property, but the state gets paid first – and you typically need to get permission from the DOR for the sale to go through.
- Paying in full or qualifying for certain programs can lead to lien release.
- A payment plan usually does not remove the lien until it’s paid in full.
What Are Georgia Tax Liens?
A tax lien is a legal claim that the IRS or GA DOR can attach to your real property, personal property, including vehicles, businesses, investments, retirement funds, and all other assets. Its legal role is to secure the government’s interest in your assets when you have unpaid taxes.
In Georgia, a tax lien is also referred to as a state tax execution under the law, as it is a form of executing a tax debt and attempting to resolve it. This legal claim is used as a collection effort because it encourages resolution in a few main ways:
- The taxpayer will want to pay the debt to remove the lien.
- The taxpayer will sell or borrow against property to pay the lien.
- The lien will progress into a property seizure, which will go towards resolving the debt.
Tax liens play an important role in Georgia’s tax collection process because they establish the legal authority to take even further action in the future. Liens, on their own, aren’t that damaging or debilitating to a taxpayer. Taxpayers can continue to live in their homes, use the assets, or maintain their bank accounts while the lien hangs in the balance.
However, once the legal claim has been established with a lien, your asset, property, or accounts are at risk of seizure. At any point, the DOR could decide to seize your funds, take your home, or repossess your vehicle.
The Creation of Tax Liens in Georgia
If a taxpayer fails to pay the tax debt they owe, the DOR will reach out to collect. If you don’t contact the agency, they have the right to file a tax lien. They’ll file a lien with the Clerk of Superior Court in your county.
This lien will automatically attach to all of your real and personal property. Its value will be based on your unpaid taxes, interest, and penalties, plus collection costs.
Does the DOR Send a Notice Before Filing the Lien?
Georgia’s DOR has the legal authority to immediately issue a lien without any notice to you as a property owner if you have an unpaid tax balance. Despite that, the agency typically follows a very specific protocol that involves sending you several notices, demanding payment, and outlining options and consequences.
Throughout the process, you always have the right to talk to the DOR about your tax situation, request a review of your tax account or financial situation, hire a legal advocate to help you determine your options, negotiate with the DOR, and apply for a payment plan.
How Georgia Tax Liens Affect You
If you’re on the receiving end, you must understand how a lien could impact you.
- Selling an asset – If you are able to sell property with a lien attached to it, the proceeds of the sale up to the amount of the lien will go to the lienholder (in this case, the GADOR), not to you. If the sale doesn’t cover the full lien, you’ll need to get it discharged to complete the sale.
- Dying with tax liens – Even if you pass away, the lien will remain on the property. If the issue isn’t settled, the tax agency will have a legal claim to a portion of your estate.
- Facing asset seizure – Once Georgia’s DOR establishes a legal claim to your property, they have the right to seize it to settle your debt if you continue to neglect your tax situation.
Types of Taxes that Can Lead to a Lien
Under the law, property liens in Georgia can arise with regard to any delinquent taxes owed to the state or to any county or municipality within the state. The priority for liens for taxes in the state of Georgia are as follows:
- State-level taxes
- County-level taxes
- Taxes due to schools or other special tax districts
- Municipal-level taxes
These taxes can stem from delinquent property, use, sales, income, and corporate income taxes.
Consequences of a Tax Lien
A tax lien will have immediate, indirect consequences. For one, anyone can perform a Georgia lien search and discover that you have a lien on your property. For another, your property is at risk for further collection efforts.
Unless you act to stop collection actions, your property and assets could be at risk of seizure. Below, we’ll go over exactly how a lien could impact you.
Impact of a Tax Lien on the Property Owner’s Credit and Property Rights
Tax liens don’t appear on your credit report. That said, tax liens are still public information, so they will impact your ability to take out credit or get new loans when they are discovered in underwriting.
How a Tax Lien Affects the Ability to Sell or Refinance the Property
You can legally sell a property that has a tax lien attached to it, but you will likely struggle to find a buyer. Depending on the situation, some of the proceeds of the sale must go to the lienholder, or if the buyer agrees to assume the lien, they generally have to pay the lienholder at the closing.
Refinancing will also be difficult and unlikely since the DOR’s legal claim will greatly reduce your home’s assessed value.
How to Resolve a Tax Lien in Georgia
The quickest way to resolve a tax lien is to pay off your tax balance in full. However, that’s not the only option.
- GA state tax payment plan – You pay off your tax debt over time, and the DOR will agree not to pursue further collection efforts against you while you pay. If you go with this option, it’s important to know that the lien will not be removed until you’ve completely paid off what you owe.
- Georgia’s Offer in Compromise – For eligible taxpayers, an OIC with the Georgia DOR can potentially significantly reduce one’s tax liability and help them resolve their tax lien sooner. Learn more with our OIC whitepaper.
- Lien subordination – It’s when the DOR agrees to have its lien take a lower priority than another lien. For example, say you want to get a home equity line of credit on your home to pay off your tax debt. However, the lender will only approve the loan if their lien has priority. The DOR agrees to subordinate, but only if you use the loan to pay the tax debt.
- Partial lien release – The DOR may agree to remove the lien from one or some of your assets. This is called a partial lien release, and again, the state will generally only agree to this if it helps you pay off your taxes. For example, you may request a release if you want to sell property to pay off your tax debt, but the lien is preventing you from selling.
- Appealing – Depending on the details and timeline, you may be able to dispute a lien by filing a petition in the Georgia Tax Tribunal, requesting a lien withdrawal or a lien subordination.
Avoiding Tax Liens in Georgia
How do you prevent a tax lien in the future? The best way to stay in good standing with the IRS and the Georgia DOR is to get informed regarding your tax obligations and stay on top of paying what you owe.
Importance of Timely Tax Payments
If you agree to a payment plan with the DOR, you need to consider the agreement legally binding. If you don’t make timely payments, that could invalidate your agreement,nt and the DOR will once again be free to restart collection efforts.
How to Seek Help if You’re Unable to Pay
Are you currently facing a Georgia tax lien and know you can’t pay off what you owe? If you’re facing a financially distressing situation, it’s a good idea to hire tax representation. A tax professional can help you review all your options based on your financial situation. They can also advocate for you while speaking with DOR agents.
Ready to Get in Touch With a Tax Attorney for Help?
If you’ve fallen behind on your taxes and are subject to a tax lien, it’s important to consider your options carefully. If you ignore the notice from the tax agency and don’t try to get back in good standing, further collection action may occur. You could have your property or assets seized, or the tax agency could issue other collection efforts against you, like garnishing your wages.
Considering the complicated nature of tax liens in Georgia, it’s usually best to discuss your situation with a tax attorney. The right tax lawyer will help you understand your options and devise a strategy for handling your tax issues.
Are you ready to get started? Schedule a call with our team at Wiggam Law to take the first step towards peace of mind.
FAQs on Georgia Tax Liens
What is a state tax execution in Georgia?
It’s another name for a tax lien. It attaches to all of your assets and secures the state’s interest in your assets when you have unpaid taxes.
How do I remove a Georgia tax lien?
The DOR will release the lien when you pay in full, and then they will remove it from the public record. Even if you can’t get it removed, you may be able to get a resolution through a partial release or subordination.
Can I sell my house with a Georgia tax lien?
Yes, but you’ll generally need to get a partial release, and the closing company will send the sales proceeds directly to the DOR, up to the value of the lien.
Does a Georgia tax lien affect my credit?
It doesn’t affect your credit score or show up on your credit report, but it’s a public record, which will be discovered by underwriters and which will affect your ability to take out loans.
How long does a Georgia tax lien last?
It’s typically enforceable for 10 years after it’s filed by the DOR. But certain events may pause and extend this timeline.
