There are millions of Americans with tax debt problems. If you are one of them you should seek professional help for a tax debt settlement. The IRS can attach your wages, your bank account, your savings, your pension and your property. They can take almost everything you own. If you do nothing their collection actions will continue until the debt is paid, and it will most likely be a painful experience.
Often the collection process does not begin until months or years after the taxes are due, which means that in addition to the taxes you may owe a substantial amount in penalties and interest as well. Fortunately there are ways to deal with the IRS that will protect your assets and allow for alternative ways to satisfy your tax debt. This will involve hiring a tax professional to represent you and to negotiate on your behalf for a tax debt settlement. It is almost impossible for an individual tax payer to represent him or herself and get any type of relief when dealing with the IRS and IRS debt.
A tax professional can almost always get some sort of abatement for his/her client. Even if it is just a reduction of penalties, it will help by reducing the balance owed and thus the amount of interest accruing each month. A tax professional will also be able to stop the levy process, which is where the IRS attaches your assets, and establish a payment plan to achieve tax debt reduction or at the very least to achieve some form of tax resolution.
When a notice of intent to levy is received from the IRS the tax payer should take immediate action. Again this will involve hiring a tax professional to work on your behalf. The tax professional will file forms to stay the collection activity for 90 to 120 days. This will allow time for the tax professional to negotiate with the IRS on your behalf and work out a tax debt settlement and/or payment plan. If you are unemployed or seriously ill it is possible to be classified as uncollectable in which case the IRS stops all collection activity and leaves you alone.
The IRS can take and sell any property, such as a boat, car or even a house. This happens only rarely. More often you will receive a notice that the IRS is levying your bank accounts and/or garnishing your wages.
When a bank levy is issued the bank is legally obligated to freeze your accounts. The bank will hold the funds for 21 days, giving you a chance to resolve the debt. If the debt remains unresolved after 21 days, the bank will send the funds to the IRS. This is why you should take immediate action when you receive notice of intent to levy. Once the account is levied the funds are as good as gone. The stay must be obtained before the levy is issued or it will not be effective until after they have taken your money. The stay will stop the levy going forward, however.
Garnishment of your pay check means that the IRS will notify your employer that you have a back tax debts and your employer is then required by law to send a significant portion of each of your paychecks directly to the IRS to offset the debt. The dollar amount sent to the IRS for your wage garnishment depends on your filing status, the number of exemptions you claim and how often you get paid. Rest assured the amount taken will be most of your pay. This can and usually will lead to a financial meltdown. You will be unable to pay your monthly bills.
A tax professional can work with the IRS to negotiate the full or partial release of the wage garnishment and to arrange tax debt settlements or an Installment Agreement to pay the IRS a specified dollar amount every month until the debt is paid.
To get the best deal for yourself you need a tax professional working on your behalf. Do your homework and find someone who has successful track record for tax debt settlement.