Bookkeeping Dictionary
Lien for taxes
The U.S. Treasury Department, as part of its tax collection machinery, has a legal claim to the property of a taxpayer whose taxes are delinquent or overdue. Assessment of tax, demand, and refusal or neglect to pay control the creation and the effective date of the lien. Sometimes the lien will attach to property in the possession of a third-person transferee or fiduciary. Sometimes a creditor or other nontaxpayer, as well as the government, may assert a claim to the same property. The question of priorities must then be settled.