Tax Liens in General & The Social Contract

Property tax liens can be a lucrative investment for the astute individual prepared to embark on due diligence in analyzing the risks assumed. For authorities, tax liens provide a means to maintain budgetary funding constraints, for the tax payer, they offer the means to repay the debt, and for the investor they are able to provide an attractive return, in return for assuming certain risks, and so they are able to make money with tax liens. The following describes how to invest in federal tax liens, and tax liens in general.

The Social Contract
Civil government is based on a social contract whereby each member of the community consents to abide by the rules of the community, and power is given to the government in the form of a trust, to be held for the benefit of the community.

For a society to operate in a civilized manner, it is essential that promises ought be kept, and accordingly, enforced in the interests of the community as a whole.

In order to fund public expenditure, a government or other qualified body uses a system of taxation to levy a compulsory contribution on people, corporations and property. People and corporations exchange this taxation in return for the enjoyment of protection, liberty and other services.
The policy of taxation is one that receives the consent of each member of the community. Directly or indirectly, via democratically elected representatives that perform governmental functions on the community’s behalf, each member has surrendered their power to a supreme body under the direction of the general will of the community.

Tax liens arise out of the failure of the taxpayer to pay federal, state or local taxes, and so the government receives the right to a lien against the property of the taxpayer.
This right to a person’s property as security for payment is able to be discharged by payment of the taxes due. If payment is not made, the lien is enforced by the authority conducting a foreclosure sale of the property.

Enforcement of Taxes by the Court
If one needs to know what court processes Federal tax liens, in the event of the claim made by the government being contested by the taxpayer, U.S. Congress has created legislative courts such as the Tax Court to decide cases involving federal tax matters,and there are also avenues of appeal within the Internal Revenue Service Office of Appeals,and the respective state and local jurisdiction appellate procedures.

After the court has ordered that the unpaid taxes be recouped, the authority to which the tax is owed is able to sell the lien itself in order to obtain the missing funds, or it is able to sell the deed to the property to which the lien is attached in order to achieve the same result.
Procedures vary from federal jurisdiction, and state to state, in the administration of tax liens, and knowledge of the appropriate jurisdictional process is required by all concerned.

Tax liens generally ‘run with the land’, and when a person is investing in a tax lien or tax deed in the event of foreclosure, they are liable for everything connected to the property with which the lien or deed runs.To know how to invest in tax liens, thorough knowledge of the forces affecting the lien is first needed.

Essentially a tool used by authorities to recover unpaid taxes,tax liens are an active market to be pursued by investors wishing to take advantage of tax delinquency. With a mortgage crisis and a growing number of home owners subject to liens on their property, the social effects on a community are just as dramatic as their economic variety, when speculators and investors seek to benefit from the impecuniosities of others, by buying tax liens for investment.

Often a fall in the general property market can see numerous properties left derelict or vacant and unutilized by their owners, simply because the taxes owed on a particular property accumulate to an amount greater than the property’s market value.In order to invest in tax liens, one must be aware of all the variables involved in tax liens investing.

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