The Consequences of Owing Taxes to the IRS: Worst-Case Scenario

As Benjamin Franklin rightly said, “in this world, nothing can be said to be certain, except death and taxes.” Although the IRS wasn’t established until 1862, Franklin’s 1789 quote is timeless and still applies today: if you owe taxes, the government will use the full extent of the law to get the money they are owed. Penalties for non-payment of taxes are severe. Wage garnishments, liens, bank levies, seizure Read More

A Brief Overview of IRS Trust Fund Penalties

Even if you’ve dealt with collection agencies in the past, the experience won’t prepare you for the IRS. If you’re delinquent in paying your federal business taxes, it can levy your company assets, bank accounts, accounts receivable, and even your personal property. Many business owners shield themselves from personal liability for company debts by forming a corporation or LLC. While this strategy can prevent Read More

Seriously Delinquent Tax Debt: What Happens and What Can You Do?

The IRS doesn’t take halfway measures when it comes to collecting overdue taxes. It can garnish your wages, file a lien on your assets, and even liquidate them to satisfy your tax debt. Over three years ago, the IRS expanded its collection powers by adding the ability to limit, revoke, or deny the issuance of your passport if you have seriously delinquent tax debt. What Is Seriously Delinquent Tax Debt? Under Read More

Understanding the Difference Between Tax Evasion and Avoidance

The terms “tax evasion” and “tax avoidance” are often used interchangeably. Although a surface similarity exists (failure to remit the correct amount of tax due), one is a criminal offense and the other can only expose you to civil penalties at most. When deciding whether a taxpayer is guilty of tax evasion or avoidance, the IRS seeks to answer the question: Are they lying or hiding? What Is Tax Evasion? Tax Read More

3 Reasons You May Be Eligible for the Currently-Not-Collectible Program

If you owe a tax debt that you can’t afford to pay, you can apply for Status 53, which is the IRS’ “Currently Not Collectible” designation. In addition to giving you breathing room on back taxes, becoming a Status 53 taxpayer stops all collection activities in progress, such as garnishments or levies. Currently, Not Collectible status is intended to relieve taxpayers who are struggling financially and have no money Read More

Understanding the Difference Between Levies and Wage Garnishments

The IRS uses bank levies and wage garnishments to collect unpaid taxes, which is why the two processes are often confused. They are both collection actions, but the similarity ends there. IRS Bank Levies When the IRS issues a bank levy, it freezes your bank account and withdraws the amount you owe. If there isn’t enough money in the account, the IRS will keep placing levies on it once more funds are available, Read More

Collections Due Process Explained

The Fourth Amendment guarantees you due process in situations where your life, liberty, or property are at risk. When you owe money to the IRS, they have the power to garnish your wages, file liens and levies on your property, and sue you, but the IRS Restructuring and Reform Act of 1998 gives you statutory rights in this situation, including the right to a hearing. A Collections Due Process Hearing gives you the Read More

Advantages and Disadvantages of Using a Tax Resolution Professional to Solve IRS Taxes

Nothing can strike fear into the heart of a small business owner or other citizen like being contacted by the Internal Revenue Service. This tax agency enjoys powers not granted to many other parts of the government. Unlike those other government agencies, the IRS can garnish your wages, freeze your bank accounts and seize your property. So, you cannot simply do nothing if the IRS contacts you or your business about Read More

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