4 Ways the IRS Can Collect Their Debt

When the IRS determines that you owe money, the collection process is steady and methodical. Below is an overview of four ways that the government commonly uses to collect tax arrears, some of which can have a serious impact on your business and your life. 1. Sending Notices It starts with the CP501 notice, which is an assessment letter informing you of your tax liability, including any interest or penalties Read More

Credit Agencies No Longer Report IRS Tax Liens

Last year the three credit reporting agencies (Experian, TransUnion and Equifax) announced that they will no longer report IRS tax liens on people’s credit reports. See https://www.experian.com/blogs/ask-experian/tax-liens-are-no-longer-a-part-of-credit-reports/. Prior to this, you had to wait seven years after you paid the tax liabilities the IRS lien covered to remove it from your credit report.  The wait was Read More

Meeting with the IRS? 3 Tips to Help You Prepare

When you receive a letter from the IRS stating that you’ve been selected for a tax audit, it’s normal to be worried even if you’ve always filed your returns on time and you’re reasonably sure that they are accurate. There’s just something about an IRS notification that makes you feel as if you’re guilty until proven innocent. Your first question after reading the letter will probably be “Why me?” followed by “How Read More

The Notice of Deficiency: What to Do If You Receive One

Few things are more worrying than receiving a letter from the IRS. When that communication is IRS Notice of Deficiency, it can be even more stressful.  This notice can advise you that the information on your tax return does not match government records, or can be sent after an IRS audit when you have not agreed with the IRS’ findings.  It also puts you on notice that your tax obligation is being assessed and gives Read More

“Should I File My Taxes Even if I Can’t Pay?”

When you do your taxes for 2018 and learn that you owe the IRS, you’ll probably be annoyed. If you can’t pay what you owe, annoyance can escalate into alarm. In this situation, it’s tempting to skip filing altogether. What’s the point if you can’t pay? Won’t a filing without an accompanying payment set the IRS on your trail because it now knows that you owe money? The bad news is that it’s true. The IRS will see Read More

Know Your Rights: What to Do When the IRS Comes After You

The Internal Revenue Service (IRS) has been described as the most powerful collection agency in the country. Unlike your average debt collector, it can impose a tax levy, seize your assets, and garnish your wages without getting a court judgment first. If you can’t or don’t pay your taxes, the IRS will eventually take steps to collect the money from you, using the methods mentioned above. While this is a worrying Read More

Tax Tips for Self-Employed People

Most taxpayers are employees who get a paycheck every pay period and can for the most part ignore their taxes until the end of the year. Their employers are responsible to withhold taxes from their paychecks and they get a W-2 at the end of the year. But if you are a freelancer or are self-employed, you alone are responsible for paying your taxes. If you are self-employed and don’t have a comprehensive Read More

What to Do if the IRS Garnishes Your Paycheck

The Internal Revenue Service (IRS) is arguably the most powerful creditor you may ever have. While you can declare bankruptcy to clear debts such as credit card bills and unpaid utilities, income tax debt is often non-dischargeable. When you can't or won’t pay your taxes, the IRS can and will garnish any income you receive to satisfy the debt. This includes: Salary Hourly wages Commissions Bonuses Unlike Read More

A Brief Overview of IRS Penalties for Nonpayment

We’ve all heard stories about the consequences of not paying your taxes. Al Capone is one famous example. More recently, Eric Galanti, former owner of three bars and restaurants in Seattle, was sentenced to eight months in prison for several misdemeanor counts of failing to file tax returns (and, by extension, pay his taxes). Although these are extreme examples, they are also reminders that the IRS frowns on Read More

Lower Your Tax Debt with an Offer-in-Compromise

The IRS has a debt settlement program called an Offer-In-Compromise.  It can be used by individuals and by businesses, such as restaurants, Airbnb owners, and professional service firms who owe the Internal Revenue Service more money than they can afford to pay can use this tax resolution tool to lower their debt. The IRS accepts offers-in-compromise to taxpayers to give them a “fresh start” without their tax Read More