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Tax enforcement: what is it?

What do you understand about tax enforcement? If you don’t have much control over the subject, know that tax foreclosure is a legal process of collecting debts that have not been paid by the debtor.

It can also be understood as the judicial procedure used to recover unpaid tax credits, through the attachment of assets and debts of debtors.

In this content, you will understand what tax foreclosure is, what the steps are, how it occurs and much more. Keep reading to check it out!

What this article covers:

What is tax enforcement?

In short, tax foreclosure is the act of executing the tax credit of a person or company upon receipt of amounts acquired through the collection of taxes and other social security obligations, carried out by the Tax Authorities.

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The process is initiated by the Treasury, through the Public Prosecutor’s Office or the Attorney General’s Office of the National Treasury, when the debt is tax. The tax foreclosure process is completed when the debtor pays the debt or when it is satisfied with any of the debtor’s assets.

But for that, steps and deadlines are necessary. And that’s what you’ll see in the next topics of this content.

What are the steps of tax enforcement?

During the tax execution there are some steps that are carried out, which you can see below:

  1. Debt Notification: the Tax Authorities notify the taxpayer of the debt collection through formal means, such as letters or telephone calls.
  2. Debt Collection: Debt collection can be carried out by administrative, judicial or extrajudicial means. In this step, notices of collection, settlement of securities, protest of securities and execution of securities are made.
  3. Debt Fulfillment: Once the debt has been collected, the Tax Authorities have the right to ask for the fulfillment of the debt. This can be done by pledging assets, collecting amounts in a bank account or suspending activities.
  4. Stays of Execution: At this stage, the taxpayer can file stays of execution to contest or suspend debt collection.
  5. Debt Payment: If the Tax Authorities are able to collect the debt, the taxpayer must pay the full amount of the debt.

Thus, you better understand how tax foreclosure works, but another important point is the deadline for tax foreclosure, which you will learn about later.

What is the deadline for tax execution?

The deadline for tax enforcement depends on the type of accumulated debt and the place where the debt was accumulated. In general, the deadline for tax execution is six months from the date of notification of the debt.

What is the deadline for tax execution?
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However, some states and municipalities have their own deadlines for executing tax debts. That’s why it’s important to check applicable laws and get professional advice before making any decision to resolve tax debt.

How does tax execution take place?

Tax foreclosure is the process by which the State collects overdue and unpaid tax debts, this means that, upon receiving an order from the tax authority, the taxpayer must pay the tax debt still outstanding.

If the taxpayer does not make the payment, the State can take legal measures to seize their assets, such as money, vehicles, real estate and others, to make the debt be paid using this method. In addition, the taxpayer can be fined with interest, fees and costs for non-payment and can even be arrested if he persists in not paying the debt.

Now that you understand about tax foreclosure, it’s time to study more on the subject to stay on top of everything related to the subject. With that in mind, check out our content and keep browsing our site!

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