What Happens During The IRS Collection Process In 2024 And Beyond
About The IRS Collection Process
Before any enforced IRS collection action, they will contact you to give you a chance to voluntarily pay what you owe. The first notice that the IRS will send you is called a Notice of Tax Due and Demand for Payment, a bill that tells you how much you owe in taxes, penalties and interest. This bill starts the IRS collection process, which continues until your account is satisfied or until the IRS may no longer legally collect the tax; for example, when the time period for collection has expired.
It is very common for the IRS to send numerous notices asking for payment before the IRS collection process escalates. If you do not pay your taxes or seek representation to explore better options or opportunities to resolve your tax debt, the IRS is required by law to take certain action. The IRS may:
- Offset A Tax Refund: If you have a refund for other tax years, the IRS will apply your refund against your tax liability. If you are a non-liable spouse and there is a refund offset, contact Tax Samaritan for assistance in preparing an Injured Spouse Allocation request,
- File A Notice Of Federal Tax Lien against your property (make a legal claim to your property such as your home as security for the payment of your tax debt). Once a lien is filed, your credit rating will likely be harmed and can affect your ability to get a loan, buy a house or a car, get a new credit card, sign a lease or even apply for a new job. The best time to contact Tax Samaritan is before your tax liability has escalated to the next level of IRS collection action, which is:
- Serve A Levy on your property (i.e. bank account) or salary (i.e. a wage garnishment). This is a legal seizure of your property to satisfy your tax debt. The IRS has the authority to work directly with financial institutions and other third parties to seize taxpayers’ assets. This action is commonly referred to as a “levy” and the IRS will issue the Form 668-A, Notice of Levy. The Internal Revenue Code generally requires the IRS to provide taxpayers notice of its intention to levy at least 30 calendar days before initiating the levy action.
What To Do If You Disagree With The Tax Amount Owe
The IRS has far greater powers than any other bill collector. The IRS has the power to put in place a wage garnishment, levy bank accounts, and other property.
If you have received an IRS notice, contact Tax Samaritan right away to preserve your rights and best options to resolve your tax liability and get IRS collection activity of your back.