What You Must Know About The Tax Collection Process

If you are getting IRS collection notices, then you must be aware that your IRS problems have escalated. You'll be finding out firsthand how the IRS's tax collection process works if you have a tax debt that has not been paid in full.

At the beginning of the IRS collection procedure, you will get a bill that itemizes the penalties and interest compounded on top of your unpaid taxes, and will not stop until the full payment of the tax bill.

Pay your tax bill in full if you can and your IRS issues will be over. Getting a cash advance from a credit card or obtaining a bank loan might be better ideas if you can't pay your tax bill because the interest on these will be lower than the penalties and interest added by the IRS.

Consider payment alternatives such as an installment agreement, or OIC or Offer in Compromise as penalties and interest will be minimized if you attempt to settle a fraction of the tax bill. If you are attempting to pay your liability, inform the IRS about it.

To warrant settlement of your taxes, the IRS can use these enforced collection actions:

• Notice of Federal Tax Lien
• Levy Notice
• Offset of a refund

A claim on your properties is called a lien. This claim encompasses property you initially owned and property you purchase after the lien is issued. It may appear on your credit report which, in turn, would do harm to your credit rating. Until your liability plus interest and penalties is settled in full, the IRS will not release the lien.

Levy Notice

The IRS is allowed to take assets like salaries, retirement plans, bank accounts, and Social Security benefits to pay off your bill by a levy. If these assets aren't enough to pay off your liability, the IRS will start seizing your property - automobiles, boat, and real estate, etc.

Offset of a Refund

If you're expecting a refund, it may be offset to the amount you owe.

If you think that your tax liability is erroneous, you have the right to question it. Your reasons must be put in writing and need to have a copy of the IRS notice you were served.

Darrin T. Mish is a Nationally recognized Attorney whose practice focuses on representing clients across the United States with IRS Problems. He is AV rated by Martindale-Hubbel and is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. He has been honored by a listing in Martindale-Hubbel's Bar Register of Preeminent Lawyers. His passion is providing IRS help to taxpayers with both individual and payroll tax problems. He teaches attorneys, CPAs and Enrolled Agents in the finer aspects of IRS representation all around the United States. He can be reached at his website at http://www.getIRShelp.com