Finding an IRS letter inside your mailbox is frightening, but what happens next can be even more terrifying. If the IRS claims that you owe additional taxes and you fail to make an effort to settle the tax debt, they have many different options for compelling you to pay. In this article, I will explain what actions the IRS can do to collect back taxes.
Contacting the IRS and making plans to pay your back taxes voluntarily is critical. If you do not, the IRS may take aggressive actions to collect the payment, leaving you reeling and struggling to keep the money you need to pay your bills, sustain your family, and keep your home.
What Are Back Taxes?
Back taxes are taxes that were due in the previous tax year but were not paid in full or in part. Back taxes accrue interest and penalties on a regular basis and you must pay them as soon as possible.
How Does the IRS Collect Back Taxes?
If you don’t pay your taxes on time, the IRS may take the following actions to collect back taxes:
- Garnishment of Wages
- Offsetting a Refund or Government Payments
- Issuing a Notice of Levy
- Filing a Notice of Federal Tax Lien
Garnishment of Wages: The IRS can reach into your paycheck, forcing your employer to withhold a portion of your pay until you satisfy your tax debt.
Offsetting a Refund or Government Payments: The IRS may withhold or offset any refunds or government payments that you may be entitled to receive to satisfy your tax debt. If you owe money to the IRS and have been waiting for your big fat refund check, you could be waiting a long time.
Issuing a Notice of Levy: The IRS has the authority to seize your bank accounts, including those used to run your business and your life. Those bank account freezes could leave you without the funds you need, putting you in a difficult situation and forcing you to repay what you owe.
Filing a Notice of Federal Tax Lien: The IRS may impose a tax lien against your property, including your home and any other real estate you own. The threat of such action has compelled many taxpayers to pay the money the IRS claims they owe.
As you can see, the IRS has multiple options to collect back taxes. They are often unwilling to settle for less than they say you owe. You must act fast if you disagree with the amount or lack the funds to pay your taxes. Ignoring the IRS notice or tax bill won’t make the problem disappear but only worsens it. Delaying could cost you more in penalties and interests down the line.
What to Do When the IRS Starts to Collect Your Back Taxes?
When the IRS starts taking action to collect back taxes, you cannot afford to take any chances. You should certainly not attempt to fight back on your own. The tax code is complicated; many of the terms are arcane and difficult to apprehend.
When dealing with the IRS, you need the assistance of a professional. That is where a tax resolution specialist comes into play. By working with professionals like Peace of Mind Tax Help, you can fight back on an even playing ground. The money you save could be worth far more than the fee you pay.
We specialize in tax resolution and helping people who owe $10,000 or more to the IRS or the state. We have a team of experienced tax negotiators who can help minimize your tax liability.
Click on the “Get Relief Now” button below today to discuss your tax debt settlement options!