What You Must Know About The Tax Collection Procedure
If your IRS problems have escalated, you will see how the IRS’s tax collection procedure works firsthand, starting with getting IRS collection notices.
The IRS collection process starts with a bill itemizing the interest and penalties compounded on top of your tax bill and will not cease until the bill is settled in full.
Your IRS problems will be finished if you can pay your debt in full. If you can’t, consider applying for a loan from your bank or advancing cash from your credit card because the interest on these are less than the interest and penalties added by the IRS.
Paying a fraction of your debt will lessen its interest and penalties. If you can’t pay in full, consider other options. These are an installment agreement or an Offer in Compromise (OIC). Let the IRS know you are trying, whatever alternative you pick. If you don’t, the IRS will proceed with its enforced collection actions.
The IRS can employ these methods of enforced collection actions to secure settlement of your taxes:
- Notice of Federal Tax Lien
- Notice of Levy
- Offset of a refund
Federal Tax Lien Notice
A lien enables the IRS to put a claim on your properties, both purchased before and after the lien was issued. This could harm your credit rating as it will be recorded on your credit report and won’t be released unless the tax liability is paid in full.
Levy Notice
The IRS can seize your assets to settle your debt by a levy.
Offset of a Refund
If you’re expecting a refund, it may be offset to the amount you owe.
If you feel that your tax debt is in error, you may submit a dispute in writing, stating your reasons and including a copy of the IRS notice you received.
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