If you owe back taxes to the IRS, you may be wondering what actions they can take to collect the money from you. The truth is, the IRS has a wide range of options when it comes to collecting back taxes and they are not afraid to use them. To help you better understand your situation, let’s break down some of the collection methods that the IRS uses to collect back taxes.
If you owe money to the IRS, one of the actions they may take to collect the debt is to file a lien. A lien is a legal claim against your property and serves as notice to creditors that the IRS has a right to your property. The lien protects the government’s interest in your property and gives them the right to take legal action to collect the taxes you owe.
IRS liens are public record which means it may be difficult to get a loan or buy a house. The lien also gives the IRS the right to collect the debt from the sale of your property if you can’t pay it back.
Before the IRS will levy or seize your property, they will send you a “Final Notice of Intent to Levy and Notice of Your Right to a Hearing.” This notice will tell you that the IRS intends to levy your assets and will give you 30 days to request a hearing with the IRS Office of Appeals. If you do not request a hearing within 30 days, the IRS will proceed with levying and /or seizing your assets.
A bank levy is one of the most common ways for the IRS to collect unpaid taxes from individuals who owe them money. When a bank levy is issued, all funds in your bank account on the day the bank receives the levy are frozen for 21 days, after which time the bank will send the funds to the IRS to pay down your tax debt. Therefore, it’s important you act quickly to try and get the levy released.
Wage garnishments are another way for the IRS to collect back taxes from individuals who owe them money. With this method, a significant portion of a taxpayer’s wages are withheld by the employer and sent directly to the government each pay period. This will continue until the tax debt has been paid in full, an alternative arrangement has been made to pay the taxes, or the statute of limitation on collections has expired. Wage garnishments often cause economic hardship as taxpayers find themselves unable to pay their living expenses with a reduced paycheck.
Levies and Seizures of other Property
The IRS has the authority to levy or seize other assets including your retirement accounts, social security benefits, home, car, retirement accounts, and other property. They can also hold onto any tax refunds you would otherwise be due.
Get Help with Unpaid Back Taxes
As you can see, the IRS has several tools at its disposal when it comes to collecting back taxes from individuals who owe them money. From levying bank accounts to wage garnishments and more, the government will use these methods to collect from taxpayers who have not made arrangements to resolve their tax debt. If you find yourself owing the IRS, it’s important that you contact an experienced tax resolution specialist right away, so they can help you deal with aggressive IRS measures to collect back taxes.
Call East Coast Tax Consulting Group today to discuss your tax debt settlement options.