IRS Collection Process
What happens if you can't afford to pay your taxes? It's a problem that sometimes cannot be avoided. How does the IRS get the money you owe? If you are late in your remittance to the IRS, you will receive an initial notice demanding payment plus interest and any late fees due. If you do not pay this initial bill by the due date, the IRS will initiate the collection process. The IRS will take most any form of payment: Credit card payment, check, electronic funds transfer (EFT) or money order, etc.
If you cannot pay the full amount, you will want to work out a monthly installment plan. Unfortunately, a payment plan will cost you an extra $50 if you want a direct debit from your bank account and it will cost $100 in fees if you want to send payments manually. Remember, you can't run from the IRS. It's better to make payments than it is to run.
What if you just can't afford to make payments? The IRS is cold-hearted, and, sadly, they have the legal authority to garnish your wages, put a hold on your bank account and administer a lien on your home, property or car if you are in delinquent status. Arrange for an installment plan if you do not want the IRS to take these drastic steps to get your money. Once you have a tax lien on your property, you will be unable to sell or transact any business on said property until your debt is fully paid. A tax lien will negatively affect your credit score as well.
If the IRS does not find success putting a lien on your property, they can use levying to physically take your property from you. You can easily wake up and find that your car or any of your physical assets are gone! All of your personal assets are fair game and capable of being seized by the IRS.
Maybe you are due a refund or earned income tax credit? You can have any refunds or tax credits that you are due applied towards your overdue debt. Always have a certified tax professional review your past tax returns to account for any refunds due to you. This could be the first step towards getting out of debt to the IRS.
Experiencing tax problems with the IRS? Contact Guardian Tax Resolutions. The Guardian will help you resolve your tax issues with the IRS.
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