If you have you received a notice from the IRS for unpaid taxes, penalties or interest it is important that you do not ignore it!
Due to the state of the economy, the IRS, as with most other business, is stepping up collections. Estimates are that there are approximately $30 to $40 billion in taxes that are due and remain unpaid.
In the past, the IRS would send several notices before taking collection actions. Currently, we are seeing Notices of Intent to Levy after as few as two notices, which leave the taxpayer much less time to respond. We are also seeing Notices of Levy being issued for smaller amounts than in the past. In addition the IRS is granting fewer Offers in Compromise (contrary to what you may have seen on misleading television commercials).
Below are several steps the IRS can take if you owe back taxes, penalties or interest:
Offset – If you have a refund in one tax period, these funds can be used to satisfy outstanding balances from another period.
File a Federal Lien against your property – this is a procedure whereby the IRS will have a legal claim to your property. Note very few items of property are exempt from this procedure.
Issue a Levy – this is a procedure whereby the IRS actually “attaches” your property. The most common form is an attachment to your wages or your bank account. They can also levy a state tax refund to apply it against federal taxes due.
Seizure – As a last resort, the IRS can come and physically take possession of your property
There are several remedies if you disagree with an assessment the IRS has made or if you cannot pay the full amount right away. If you have received a notice and would like to discuss your options, please call our offices at (215) 665-3960 as ask to speak to one of our shareholders or email us at info@taxwarriors.com.