Guide to Georgia Tax Liens and Excutions
If you don't pay your taxes in Georgia, the Department of Revenue (DOR) can issue a state tax lien against you. Also called a state tax execution, the lien attaches to all of your property. A tax lien can make it very difficult to sell, transfer, or borrow against your property.
In Georgia, tax liens stay in place until they expire, or you pay your tax debt in full, but in some cases, you can convince the DOR to remove some or all of the lien. Here's what you need to know.
How Does a GA Tax Lien Work?
The GA DOR has the right to issue a tax lien without notice if you have unpaid taxes. Generally, the DOR will send you several demands to pay before it issues the lien, but if necessary, the DOR can file the lien as soon as you have an unpaid balance.
The DOR files a lien with the Clerk of Superior Court in any county where you own property, and once issued, the lien attaches to all of your real and personal property. The amount of the lien is your unpaid state taxes plus interest and penalties, and in most cases, the DOR will also add the cost of filing the lien onto the balance.
How a Tax Lien Affects Your Assets
Here's how a state tax lien affects your assets in various situations.
If you transfer property, the lien stays attached to the property. For instance, let's say you have a GA tax lien for $10,000 attached to your home, and you give your home to your nephew. Now, the lien is attached to the home that your nephew owns. Depending on how you handle the transfer, the lien may even stop the transfer from moving forward.
If you sell property, the DOR has the rights to the proceeds up to the amount of the lien. For example, say that you have a $20,000 tax lien and you sell a car for $5,000, the DOR will be able to take all of the proceeds from the sale, and a lien for $15,000 will continue to exist. However, if you sell a piece of vacant land for $45,000, the DOR will get $20,000 to cover the lien, and you will get to keep the remaining $25,000.
If you are trying to use an asset as collateral, lenders will not work with you if there is a lien against the asset. Why? Because if you default on the loan, the lender will want to seize your collateral, and that isn't possible if the DOR already has a lien against the property.
To get a loan, you may need to convince the GA DOR to agree to take priority behind the lender. Typically, the DOR will only accept this type of agreement if you're using the funds to pay off your tax bill.
It's also important to note that you won't be able to get loans to buy new property. State tax liens attach to your current and future property. By extension, if you go buy a car, the lien will automatically attach to it, and because of that, no one will lend you money to buy the car.
If you die, your assets pass to your estate, and the lien stays attached to the assets. The estate must pay the liens before it can pass the assets to your heirs. In some cases, the estate may have to sell the assets to cover the tax lien.
Beyond the above consequences, a lien also opens the doorway for the DOR to start other collection actions, such as wage garnishment or asset seizure. However, the state must send you a notice before taking those types of actions.
How to Remove a GA State Tax Lien
There are a few different ways to remove a state tax lien. Here are the main options.
- Pay your tax debt in full — If you pay your delinquent GA taxes in full, the DOR will update the execution docket to show that you have paid, and the agency will cancel the lien in every county where it has been recorded.
- Apply for an offer in compromise — If you prove that you cannot afford to pay the full balance, the DOR may approve a settlement on your account, and then, the agency will usually release the lien.
- Request a withdrawal due to error — The DOR should remove all liens that were filed in error. For instance, this may apply if a lien was filed in your name by mistake or against property that you don't really own.
- Wait until the lien expires — GA tax liens only last 10 years, and the state releases the liens from your assets once the statute expires. You can try to wait out the lien, but keep in mind that the state may garnish your wages or seize assets if you don't pay.
- Request subordination — Subordination is when the state agrees to take priority behind another creditor. You may want to request subordination so that you can take out a loan to pay your taxes.
- Ask for a partial lien release — You can ask the DOR to remove the lien from specific pieces of property. For instance, if you need to sell an asset to pay your taxes, you may need a partial release.
To apply for a partial release, submit Form CD 14135 (Application for Certificate of Release of Property From State Tax Execution). Use Form CD-14134 (Application for Certificate of Subordination of State Tax Execution) to request subordination.
When you apply, make sure to explain why you want the release or subordination. Also, make sure that you apply at least 21 days before closing if you're trying to get a loan. A GA tax professional can help you fill out these forms or make other requests to the GA DOR on your behalf.
How to Find Tax Liens
Not sure if there's a lien against you? Wondering about the amount of the lien? Then, you can do a Georgia lien search on Solved the tax lien search for the state's tax e-services. To search for a lien, you need the taxpayer's first and last name and the last four digits of their social security number.
Liens are public records. This means that lenders and others can find a copy of your lien. The GA DOR doesn't alert the credit bureaus about tax liens, but as they are public records, the tax bureaus can opt to put this information on your report. If your credit report shows a lien for a tax that you have already paid, contact the credit bureau directly to ask to have the lien removed.
Statute of Limitations on Tax Liens in Georgia
The DOR must issue liens within five years of the tax assessment date. For taxes assessed prior to January 1, 2018, the deadline is seven years. Once recorded, the lien lasts for ten years. It cannot be renewed, but there are acts that pause the clock for the statute of limitations, such as setting up an installment agreement.
Options for Paying Back Taxes in GA
Ideally, you should reach out to the state before the DOR files a lien against you. If you set up a payment plan, you may be able to avoid the lien. Generally, the state stops pursuing collections against people who have approved payment plans, but depending on the situation, the state may still issue a lien.
Get Help With GA State Taxes
Dealing with IRS and state tax problems can be expensive and stressful. To ensure you get the best resolution possible, you should work with a tax pro with experience with the GA DOR. TaxCure has a directory of experienced tax professionals based in Georgia as well as other states.
Using our website, you can search for an enrolled agent, CPA, or tax attorney based in your state. Then, you can narrow down the results to find someone with the experience you need. Don't wait — use TaxCure to find high-quality, trustworthy, experienced, and, most importantly, local help today.