Many people who are experiencing financial difficulties may find that they are unable to pay their taxes to the Internal Revenue Service (IRS). The IRS takes the process of collecting unpaid taxes very seriously. In fact, if you have not paid your taxes, the IRS can impose a number of penalties on you.

It’s important to understand how the IRS collection process works so you know what to expect in the event that you are unable to pay your taxes. It’s also wise to seek legal representation from an experienced tax debt attorney as soon as possible. The attorneys at Benner & Weinkauf can help you resolve your tax debts so you can secure your financial future.

HOW DOES THE IRS INITIATE THE COLLECTION PROCESS?

The IRS will send you a tax bill if they determine that you have not paid your taxes in full. This is how the IRS initiates the collection process.

The first letter that the IRS sends will tell you exactly how much you owe, which will include the original amount of unpaid taxes in addition to penalties and interest accrued on this balance. This letter will also tell you how long you have to pay this balance in full. If you can, it’s best to make this payment as soon as possible. The IRS will continue to impose penalties on this unpaid balance and interest will continue to accrue on it as well. The sooner you pay it, the less you will have to pay.

WHAT SHOULD YOU DO IF YOU RECEIVE A TAX BILL FROM THE IRS?

Unfortunately, many people who receive a tax bill from the IRS are unable to pay the amount they owe. If you are in this situation, it’s important to take action right away by contacting an attorney. Do not simply ignore the tax bill–this will only make matters worse.

There are two ways for you to resolve this issue when you can’t pay the amount in full. The first is setting up a payment plan with the IRS. This option allows you to make smaller, more manageable monthly payments to the IRS until your tax debt has been paid in full. If you choose a short-term plan, you will need to repay your tax debt within 120 days. But if this isn’t possible due to your financial situation, you can choose a long-term plan, which will give you more time to repay your debt.

The second option is negotiating an offer in compromise with the IRS. You are only eligible for this option if you are experiencing some type of financial hardship that makes it difficult or impossible for you to pay your full tax debt. If you are eligible for this option, the IRS will allow you to make an offer to reduce your tax debt.

For example, say you owe the IRS $10,000. The IRS may accept an offer to settle this debt for $6,500. In this case, you can wipe this $10,000 debt off of your record by paying only $6,500.

WHAT HAPPENS IF YOU DON’T CONTACT THE IRS TO PAY YOUR TAX BILL?

If you fail to pay your tax bill, establish a payment plan, or negotiate an offer in compromise, the IRS will take action to collect the taxes you owe. The IRS may collect this money by:

  • Filing a federal tax lien against any property that you own, even property that was acquired after the lien arises.
  • Issuing a levy. Unlike a lien, which is a legal claim to property, a levy allows the IRS to actually seize property from you in order to repay your tax debts. The IRS has the authority to seize many different types of properties, including homes, boats, cars, cash in bank accounts, and more.
  • Taking a tax refund from you. If you are entitled to a tax refund in the future, the IRS can seize this money and use it to repay your tax debt. The IRS can continue to seize refunds until your tax debt has been paid in full.

This is the final stage in the IRS collection process. But it doesn’t have to get this far–you can avoid these consequences by taking action early on with the help of a tax debt relief attorney.

SET UP A FREE STRATEGY SESSION WITH OUR ATTORNEYS IN PLYMOUTH TODAY

Do you owe money to the IRS? If so, don’t hesitate to contact the experienced tax debt attorneys at Benner & Weinkauf. We are passionate about helping our clients find solutions that help them clear their debts and get a fresh financial start. Tell us more about your unique financial situation so we can begin putting together a custom plan for you.

To schedule your free consultation, call Benner & Weinkauf at 774-404-8321 or submit your information using the form on this website.