Tax Leins
A lien is a form of penalty that is imposed on defaulters when they fail to pay their dues on time. Similarly, a tax lien is a form of fined levied on tax payers who fail to pay their taxes within the prescribed time period. Every democratic government runs its machinery with the help of funds collected from its citizens in the form of taxes. When these taxes are not paid on time or not paid at all, the government finds its financial power crippled and is forced to levy a fine on default payments. A tax lien is therefore meant to force tax payers to pay their dues on time or else face the prospect of paying an additional amount as lien on the unpaid taxes.
Most of us are already familiar with various types of fines that are levied for various violations. A parking ticket is one of the most common types of fines that vehicle users are quite familiar with. When they park their vehicles in a restricted area or when they exceed the time limit that they have already paid for, a fine is imposed on them which they are required to pay within a certain period of time. Likewise, various violations attract various kinds of fines. The fines for moderate violations are quite low whereas more serious violations attract heavy fines to the tune of a couple of hundred dollars. Thus fines are a form of deterrent that prevent potential violators from going ahead and actually committing the act of violation.
Another major area where tax liens are imposed on defaulters is in the area of real estate. Property taxes are a huge source of revenue to the respective governments. When property tax payers default on their payments, the government finds it extremely difficult to carry out its regular tasks effectively. Therefore the government is forced to levy tax liens on defaulters in an effort to prevent them from defaulting in the future as well as to warning other tax payers of similar consequences if and when they fail to pay their property taxes. In order to safe guard oneself from these penalties, one needs to be diligent in paying all tax dues on time.
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