Being contacted by the IRS can be extraordinarily stressful, especially if they plan to audit you or if you’ve been accused of significantly underpaying your taxes. It may seem like the notice you receive can be easily pushed aside and dealt with later, but don’t delay in addressing your IRS and tax issues. If you hesitate to resolve these matters, then you could end up facing significant consequences.
There’s a lot that could happen to you and your financial stability. This includes:
- Garnishing wages: If you can’t or won’t pay your tax debt in full or get set up on an installment plan, then the government might garnish your wages. Having this money pulled out of your paycheck each pay period can leave you in a tough financial position where you struggle to pay your rent, mortgage, or car payment and cover your basic expenses.
- Application of a tax lien: When you don’t pay your tax debt, the IRS may place a lien on your property. This protects the government’s interest in your property so that, if needed, they can eventually take that property to satisfy the debt you owe. A tax lien can make it extremely difficult, if not impossible, to sell your property and secure new loans.
- Levying your property: While a tax lien protects the government’s interest in your property, a levy is the process of actually seizing that property to satisfy an owed tax obligation. The IRS has broad authority here, too, meaning that they have the power to seize and sell any of your property, including your vehicles and your home.
- Shutting down your business: Your business can be at risk if you don’t satisfy your tax debt. The IRS can swoop in and seize your business assets, including equipment and inventory, effectively putting you out of business with little to no notice.
- Putting you on an installment plan: You might need an installment plan to be able to pay your tax debt. But if you don’t work with the IRS, then they might automatically put you on a repayment plan that you simply can’t afford. This can be stressful, but it can also put you at risk of some of the other collection methodologies mentioned above.
- Charging criminally: If the government thinks that you’ve intentionally evaded your tax obligation or have engaged in fraud, then they might come after you with criminal charges that threaten severe punishment.
How can you avoid these aggressive IRS debt collection practices?
Fortunately, you have several options for resolving your tax debt that can avoid these harsh collection efforts. As we’ve discussed previously on the blog, offers in compromise can be an effective way to resolve your tax debt, but you might also negotiate an affordable payment plan or a penalty abatement that makes it easier for you to make good on your debt obligation. You might also be able to claim innocent spouse protection. Make sure you understand the breadth of your options so that you can choose the path that best protects your financial interests.
Don’t hesitate to address your tax debt
Dealing with tax debt can be stressful and sometimes confusing. But you can’t let the complexities and the anxiety of your situation paralyze you into inaction, as doing so puts you at greater risk of an outcome you want to avoid. So, if you have questions about how to best address your IRS and tax issues, then now is the time to educate yourself about your options and seek answers from those who are positioned to provide you with clarity and the understanding you need to confidently move forward with your case.
