The IRS is one of the most powerful creditors a person can have under U.S. law. There are many types of collection actions that the IRS may take that an ordinary creditor would not be allowed to.
If you owe the IRS money, you may be at risk for any of the following types of collection actions.
Tax Refund Seizure
The IRS can seize both your federal and state tax refunds if you owe tax debt. The refund is applied to your balance.
Tax Lien Filing
The IRS can file a Notice of Federal Tax Lien to secure your debt. This notifies your other creditors that you owe taxes and the IRS has an interest in your property.
You may be unable to sell, refinance, or borrow against your home unless you take action to get rid of the tax lien.
The IRS is permitted to garnish a portion of your wages from each paycheck. They are only required to leave you with a specific amount of money each month based on your filing status and number of dependents.
Any bonuses or commissions you receive you be 100% garnished and applied to your tax debt.
Bank Account Levy
The IRS can seize the funds in your bank account up to the amount you owe. If you owe more than your bank account balance, your entire account can be drained.
The IRS can notify the State Department if you have seriously delinquent tax debt. The State Department can then decide to revoke your passport or deny your passport renewal, limiting your ability to leave the country.
The IRS will only take this action when you owe over $52,000 and certain other conditions exist.
The IRS also has the power to levy the funds in a retirement account, 15% of your Social Security benefits payments, and many types of personal property. These collection tactics are not as common, but the IRS can use them in extreme cases.
For any type of collection action, you generally have several rights:
- The IRS must usually send you a notice in the mail before taking the action.
- You may have the right to appeal the action or request a hearing.
- You can typically avoid the enforced collection action by negotiating a collection alternative, such as an installment agreement.
You must take action to assert your rights. Contact a tax resolution attorney to protect your property and discuss your collection alternatives.
Get help with IRS collection actions by calling The Gartzman Law Firm at (770) 939-7710. We can listen to your concerns and help you find the best tax resolution strategy for your case.