What is IRS collection process?
If you have been convicted of tax evasion or tax avoidance, it is possible that the IRS will start a process to ensure your tax debt is paid. This process is also started when you do not pay your taxes in full when you file.
How Do I Know If The IRS Has Started Collection?
Initially, the IRS will send you a bill which will state why you have a outstanding tax balance. This bill will also include any penalties and interest that are added to your unpaid balance calculated from the date your taxes were due. You can pay this bill in full with a check or money order payable to the United States Treasury or by credit card.
What Happens If I Cannot Pay In Full?If you do not pay the entire tax bill, the unpaid balance will be subject to interest which is compounded daily. You will also be charged a monthly late payment penalty. Therefore, you should try to pay as much of the balance as possible.
It may be in your best interest to take out a bank loan or a cash advance on your credit card to help you pay the tax bill. The interest rate that your bank or credit card charges may be lower than the interest rate charged by the IRS. This may also help to avoid having your tax debt destroy your credit rating.
If these steps do not cover your debt, you may be able to negotiate a monthly installment plan with the IRS. You may also be able to negotiate an offer in compromise with the IRS.
Can The IRS Take My Property?Yes, the IRS can place a tax lien on your property to satisfy your tax debt. The IRS can also serve you with a Notice of Levy which allows the IRS to legally take and sell your property to satisfy your tax debt. Here your "property" includes Social Security benefits, wages, bank accounts as well as your real estate, car or boat.
Do I Need A Tax Attorney?If the IRS has started its collection process to satisfy your tax debts, you should contact an experienced tax attorney immediately. Tax law can be very complicated but a tax attorney will be able to asses your debts, communicate with the IRS on your behalf and present your case to the court to protect your assets. |
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