Guide to Tax Debt, Payment Plans, Releases, Liens, and More

Can the IRS place a lien against my property?

When enough time has passed since your tax debt was due, the IRS can file a lien against property you own. There are rules in place to protect the average citizen which include the fact that they must first notify you of the intent. After notification, you have to respond within 10 days. If you feel that the IRS claim is inaccurate, contact them immediately and file the appropriate form(s). In the event, that they are correct and you are behind in paying your taxes, talk to them about options for repayment including the possibility of setting up an installment payment agreement. Ideally, this is a step that should be taken long before you are contacted by the IRS regarding a lien. A tax advocate in your state may be able to help you through the process to alleviate your tax problems.

Can the IRS send me to jail?

When you owe money to the IRS, they have a number of options available to them to make sure you fulfill your obligation. This may even include sending you to jail for tax evasion. This of course is typically the last option that the IRS will take and is reserved for people who repeatedly fail to file a tax return. For the average citizen who voluntarily files a return, attempts are made to work out terms for repayment.

Filing your tax return is a requirement for all U.S. citizens. When you don’t, the IRS will automatically file a return for you. Unfortunately, they don’t take into consideration all of the credits and deductions that you may be eligible to receive. To make sure you have the best deal and keep the total amount of your tax liability as low as possible, make sure you file your own tax returns and work with a tax professional if necessary rather than have the IRS complete a return for you.

Can the IRS garnish my wages?

To make sure that you tax liability is paid in full, the IRS can contact your employer to set up wage garnishment. While they have to leave some money for you to be able to eat and take care of your family, they may not leave much. Depending on how much you actually owe, the amount that you may be left with will barely be enough to pay your bills. Since the IRS offers so many options to help you pay your taxes, you should be able to avoid having this happen to you. If you are getting to the point where you could face having your wages garnished, you may want to check with a tax advisor to understand what other options may be available to you.

What payment options are available for taxes?

Back taxes that are due to the IRS need to be paid as quickly as possible. The longer you wait, the more the penalties and late fees will add up. While the IRS offers payment options, they will charge interest on the amount. When you add up everything, you may find it is actually cheaper to get tax debt help through a lender that specializes in making loans for these situations. You can find more information about this be searching the web or contacting the experts at DebtHelp.com to find out what options may be available to you.

What is a bank levy?

One of the options the IRS has to get the money you owe in taxes is a bank levy. Essentially this requires them to send a notice to your bank claiming all of the funds you have available up to the amount that you owe. The levy serves as a legal claim and seizure of the funds. This will only occur after the IRS has assessed your tax and sent you notification for payment. If you don’t pay, a notice of the intent to place a levy against your funds or other property will be sent to you as well as your right to request a hearing. You will receive these 30 days in advance of when the levy will be placed. When you receive the initial notice regarding the taxes that have been assessed, start talking to a tax expert if you know you won’t be able to pay. If you wait until they have placed a levy, it is much more difficult to change the process.

If your bank charges you fees for a levy that was placed in error on your account, you may be entitled to a refund. If this happens contact the IRS and complete the appropriate form to explain why they should reimburse you for the fees.

How is my business impacted by federal tax law?

Federal taxes must be paid by all businesses and require more than just the standard income taxes paid by individuals. Any business that has employees is responsible for the reporting of all payroll taxes. The payroll taxes include all withholdings for employees like state and federal taxes as well as federal unemployment tax, Medicare and Social Security. For those business owners that are their own boss, self-employment tax which includes Medicare and social security must be paid. In addition, a business owner is required to report and pay appropriate excise taxes on all goods and services that must be taxed. All of this can be a lot for a business owner especially for smaller businesses that don’t always the staff with the resources or knowledge to be able to process all business taxes. Finding that your business is overwhelmed with all of the tax responsibilities, you may find it easier to work with a tax expert or attorney to get the business tax relief you need.