Hyden, Miron & Foster, PLLC Law Blog

Tuesday, February 14, 2017

What steps can the IRS take to collect back-owed taxes?

Let’s face it, nobody likes to pay taxes, but it is a reality of the society in which we live. Some people may not be able to pay the taxes they owe, or may think that the IRS will not catch up with them. In either case, inevitably, the IRS will come knocking. Loudly.

If you owe taxes, the IRS expects payment immediately. If they do not get payment immediately, they will send you a bill for the amount that you owe. Depending on how long the tax debt has been owed, you may see an itemization of the tax owed, plus interest and penalties from the date it was due. If you know that the back taxes are valid, there may be no need to contact a tax law attorney immediately. However, if you don’t think the tax is valid, or you don’t think you can manage the debt, it may be a good time to call.

What happens if you can’t pay your taxes?

If you are unable to pay your back taxes in full, the IRS may accept a payment plan from people who owe less than $50,000 (sometimes $100,000), so long as the debt is paid within three years. You will still incur penalties and interest during that time, so it would be in your best interest to pay off as much as you can, as soon as you can.

Payment plans are best done either through payroll deduction or auto-pay, in order to avoid defaulting on the agreement.

Won’t the tax debt just go away eventually?

Well, yes, in ten years. However, if you do not contact the IRS to establish a payment plan and do not pay off your taxes, they will do whatever they can to collect that debt. This includes:

  • Filing a notice of federal tax lien
  • Serving a notice of levy
  • Garnishing your wages
  • Garnish your bank accounts
  • Take your social security benefits
  • Seize your retirement income

Because they are a government entity, they don’t have to jump through all the hoops that a regular creditor would have to, such as obtaining a judgment. They do have to provide you with notice, and that is about it.

If you are facing IRS collections actions, there are ways that an experienced tax attorney can help, including:

  • Filing for relief due to economic hardship
  • Making an offer of compromise

Do You Owe Back Taxes?

It only gets worse the longer you wait. The experienced tax attorneys at Hyden, Miron & Foster can help determine what your rights are and see what options for reduced payments can be made. Contact us today or call 888.770.1848 for a consultation.


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