Know what you’re up against! The IRS can take collection action by almost any means necessary. Don’t let yourself fall victim to one of the following:
One of the most aggressive collections tactics is a Wage Garnishment (Levy). After failed attempts to collect on a tax liability, the IRS and/or State may legally contact your employer and mandate they withhold a portion of your pay and send it directly to the tax agency.” This portion may be a percentage, a fixed amount, or any amount in excess to what the IRS/State determines is your living expenses (typically the amount allocated for living expenses is extremely low)
A bank levy occurs when the IRS contacts your financial institution and demands them to freeze the available funds in your account for a period of 30 days. If you have not paid the overdue tax assessment, the bank is required to send the funds to the IRS
A tax lien may be placed on any asset you own, but are most commonly put on credit and homes. If a lien is placed on your credit, it may be more difficult to qualify for loans or purchase property. If you are selling a home with a tax lien against it, the lien will be paid before any mortgage holders. The tax lien cannot be removed until it is paid in full.
Un-filed Tax Returns
Not filing tax returns is a very serious matter. In extreme cases, the IRS may consider this an act of tax evasion, which is punishable by a $10,000 fine and/or one year in jail for each year un-filed. The IRS may issue a substitute for return (SFR) and tax you with (0) deductions and exemptions. If you re-file after an SFR, it is very likely you will be subject to an audit.
The IRS has recently increased its collection efforts against delinquent business entities owing payroll tax. A Revenue Officer may seize assets and even shut down the business if they deem necessary. Our Tax Professionals are well-versed in payroll (Forms 940 &941) and corporate taxes (Form 1120).