Methods That The IRS Can Collect Taxes

The IRS takes non-payment of taxes very seriously.

They will pull out all stops to collect the taxes which are owed to them. This process goes from a simple letter with a bill all the way to garnishment. Let's take a look at all the methods that the IRS can collect taxes with.

The IRS will first send you a letter detailing the balance due and that it requires full payment. This letter will include interest and tax plus penalty starting on the date the taxes were due.

If you are not able to pay in full, it is advised you send in what you can with the notice. The balance that is left over is subject to daily interest and a monthly fee. This can add up over time and it is best that you try to pay the balance in full as soon as possible to end up not being stuck in a constant state of only paying interest and fines.

Another way the IRS can go about collecting taxes is by placing a federal tax lien against your property. This tax lien affects property that you purchase even after the lien was made. The lien process starts if you don't respond within ten days of receiving your first notice that unpaid taxes are due. A federal tax lien may appear on your credit report and it cannot be lifted until all debts are paid to the IRS. This includes penalties and interests.

Notice of Levy is one of the methods that the IRS can collect taxes with. When the IRS uses a Notice of Levy they can confiscate your property and sell it to satisfy all debts owed. They can seize your home, car and boat. The levy can be used to seize bank accounts, retirement funds and social security.

State income tax refunds that you are due can be confiscated by the IRS. With a Notice of Levy your wages can be garnished and even your federal tax refund used to pay off your debt. Of all Methods That The IRS Can Collect Taxes with, the Notice of Levy is perhaps the most damaging to the debtor that owes the IRS.

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