Definition for: Tax Lien
A "tax lien" is a legal claim filed by a state or federal taxing agency against the assets of a person or entity that has failed to file returns or pay the taxes due. Typically, a notice and demand is sent to the taxpayer before a lien is filed. If the taxpayer does not respond or correct any deficiencies within the time period specified in the notice, a tax lien may be filed. The lien will be for the amount of taxes due. If the taxpayer has failed to file returns, the taxing agency will determine the amount of taxes due, and thus the amount subject to a lien, based upon their own records.
