If you owe a balance to the IRS, one question you may be asking yourself is, what happens if I don’t pay back my tax liability? There are many ways the IRS can come after you. and it’s important to understand how to protect your assets, your money, and yourself. If you owe a tax liability with the IRS, they can take action against you that could leave you in financial hardship. There are options that the IRS does provide to all taxpayers that are looking to get compliant with the IRS and solutions to resolve any collection action the IRS has taken against you.

Lien

The government can make a legal claim against your property should you fail to pay your tax liability back. Typically, a lien is placed on a physical asset if a taxpayer fails to pay back their tax balance. Any lien placed against a taxpayer is to protect the government’s interest; liens can be placed on property such as real estate, personal property, and financial assets. If you are looking to remove your lien, one way is by requesting a lien payoff amount or paying back your balance in full.

Levy

A levy allows the IRS to legally seize your property in order to satisfy the tax debt you owe. For example, the IRS can place a bank levy against an individual if they have an outstanding balance. Once the levy is issued, the bank is instructed to place a hold and freeze all available funds on that day for 21 days before remitting it to the IRS. Once this collection effort is initiated, you have 21 days to contact the IRS and resolve the issue before the funds are remitted to the IRS.

Garnishment

The IRS has the power to garnish your wages or legally seize any income you make in order to satisfy your outstanding debt. Garnishments can affect the hourly wages, salary, commissions, and bonuses you receive, causing you to fall into a financial hardship. A few ways to stop the IRS from garnishing your wages includes either paying your balance in full or entering into an installment agreement to halt any further collection action.

If you currently owe the IRS, it is important to understand that they can take collection action against you at any time. You can contact the IRS to work out an agreement to avoid them from coming after you. If you have no idea where to start with dealing with your tax liability, you can contact a tax professional to assist you with your tax situation. A tax professional will help you get compliant and out collections with the IRS so you can move on with your life.

 

The content contained on this page is strictly for informational purposes and may not apply to your specific situation. We recommend you consult with a tax professional to evaluate your unique situation. Forward Tax does not provide tax, bankruptcy, accounting or legal advice.

Posted in IRS