What it is:
How it works/Example:
When a taxpayer fails to pay either income taxes or property taxes, the taxing authority to whom the debt is owed may place a lien against the taxpayers property to ensure that the tax liability will eventually get paid. A property with a tax lien cannot be sold by the owner, which prevents the owner from walking away from the tax liability.
Why it matters:
Tax liens are highly effective for tax enforcement since the property holder can not sell a property that has a lien on it. The taxing authority will keep a lien on the property until the tax liability is paid.