IRS Tax Debt Collection

Last updated on October 11, 2021

Many times taxpayers avoid paying of back taxes due to one reason or the other. In such cases of unpaid taxes, the IRS sends notices to taxpayers under tax debt informing them about the amount of taxes that remain to be paid.

After sending of notices if taxpayers neglect or avoid fulfilling their tax debt, they may expect IRS’ collection actions for collection of back taxes. The IRS may place a tax lien and may proceed to place tax levy if no effort to pay back taxes is made.

Under tax lien, the IRS has the legal right to claim a taxpayer’s property to secure payment of tax debt. After receiving the notice of tax lien, taxpayers must immediately correspond with the IRS and make efforts to pay the tax debt. In case they don’t, the IRS may place federal tax levy.

Under tax levy, the IRS seizes and may sell the property of taxpayers including wages, dividends, rental income etc. to fulfill the tax debt. Tax levy is the most aggressive collection action of the IRS. After tax levy has been placed, it is difficult to remove it. Therefore, it is best for taxpayers to prevent tax liens and tax levies by making efforts to pay taxes owed.

It is advisable to take outside help for the payment of tax debt especially when taxpayers are unable to pay the entire tax debt amount in a single payment. Choosing of an IRS debt payment program is a crucial decision that depends on many conditions including the financial state of taxpayers. To pay tax debt, resolve and prevent tax liens and tax levies, taxpayers must act today to pay their back taxes to the IRS.