Ignoring a bill from the IRS is very different from ignoring other bills. Unlike a missed utility payment, the Internal Revenue Service has legal power to enforce collection. Through penalties, interest, liens, levies and wage garnishment, the IRS can take aggressive action to recover unpaid taxes. Responding early can help protect your finances and assets.
The First Step: IRS Notices~ Most IRS collection cases begin with a Notice of Amount Due. This letter explains what you owe, when it is due, and what interest or penalties have been added. Many taxpayers feel overwhelmed and put the notice aside but delay usually makes the problem worse.
If the balance remains unpaid, the IRS will send additional notices showing rising penalties and interest. These letters give taxpayers a chance to resolve the issue voluntarily. Paying the balance, disputing an error, or arranging a payment plan early can often stop the matter from escalating.
Liens and Levies ~ If the IRS receives no response, it may file a federal tax lien. A lien is a legal claim against your property and financial assets that can make it difficult to sell, refinance, or transfer property, including your home.
In more serious cases, the IRS may issue a levy, allowing the government to seize assets to satisfy the debt. This can include bank accounts, vehicles, and other property.
Wage Garnishment and Income Seizure ~ The IRS may also garnish wages, sending part of your paycheck directly to the government. It may intercept tax refunds or levy funds from bank accounts and certain investments. While some income sources may be protected, assets such as savings accounts, retirement funds, and other financial resources may still be vulnerable.
Options May Be Available ~ Taxpayers facing IRS collection actions often still have options. The IRS may allow installment agreements that spread payments over time. Some taxpayers may qualify for penalty relief or an Offer in Compromise, which may allow settlement for less than the full amount owed.
Get Experienced Guidance ~ An experienced tax attorney can review your situation, communicate with the IRS on your behalf, and help develop a strategy to protect your assets while resolving your tax obligations.
For more than 20 years, the attorneys at Silver Law LLP have been fighting for taxpayers and businesses facing IRS audits, tax debt, and collection actions. With former IRS trial attorneys and more than a century of combined tax controversy experience, the firm brings insight and proven strategies to complex tax matters.
If you have received IRS notices or are concerned about tax collection actions, contact Silver Law LLP.
Silver Law LLP – San Diego Office
7676 Hazard Center Dr., Suite 1525
San Diego, CA 92108
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