IRS Taxes: Frequent Dilemmas Faced by IRS Tax Debtors

IRS Taxes and Related Problems

irs taxes problemsIf you recently discovered you owe IRS taxes, you may have many questions about what that means for you. It is important to find out what kinds of problems you may wind up facing, and the solutions available. Entire books do not cover everything there is to know, but most people deal with very similar situations with their IRS taxes. This page will give you a brief understanding of some very common situations.

IRS Taxes Liens

Liens give the IRS a legal claim to a taxpayer's property as collateral on your IRS taxes. If you owe IRS taxes, chances are you probably have a lien placed against you already. You have 10 days to pay your debt or make an agreement after the Notice and Demand for Payment is sent. After that, you are subject to a tax lien. The more you owe, the more likely the IRS will place a lien on you. Problems associated with liens on IRS taxes include:

  • Significant harm to credit ratings, and the issues that go along with that.
  • The removal of security clearances and government contracts.
  • Difficulty obtaining employment, due to poor credit.
  • Inability to sell or refinance property.

IRS Taxes Levies

There are many different types of levies used to collect on IRS taxes. The two most common types are bank levies and wage levies.

Bank Levies

A bank levy can hit at any time and on multiple accounts simultaneously. The day that your financial institution receives the notice from the IRS, whatever is in your account at that time will be set aside to send to the IRS in 21 days. If you have more in your account than you owe in IRS taxes, only what you owe will be set aside.

The only way you can get any of that money back is to prove considerable hardship during the 21 day freeze. After the 21 days is over, the money is sent to the IRS along with any interest that accrued on it. This is directly applied to what you owe in IRS taxes. A few examples of accounts that are susceptible to bank levies include:

Wage Levies

The IRS often sends notices to employers to garnish employee paychecks to collect IRS taxes. In fact, if you owe IRS taxes, your employer will know about the impending wage levy before you do. Unlike other types of garnishments, a percentage is not taken out. Instead, the IRS decides how much money you need to survive based off the filing status and allowable exemptions on your W4. If you are a contractor, the IRS will actually take an entire 1099 check with a wage levy.

Unfortunately, many people find that they are not left with enough to pay all of their monthly bills. It is sometimes cheaper to be unemployed than continue to work and come home with so little income. Employers have been known to fire employees rather than deal with a garnishment on IRS taxes. If you file jointly or live in a community state, your spouse may also experience a wage levy.

IRS Taxes Solutions

There are a number of solutions for different IRS taxes situations. Again, they could fill books upon books. The best way to avoid these issues is to simply pay your IRS taxes completely. However, that isn't always possible. If you owe than less than $10,000, it may be quite easy to work directly with the IRS toward the best tax resolution. However, if you have a higher debt, it is a good idea to work with a tax debt professional instead.

Do you need help with your IRS taxes? Consult a professional. Call now or fill out the form below for a free tax debt consultation on the best resolutions for your IRS taxes! We'll only connect you with a tax debt relief company holding at least a B rating with the Better Business Bureau.

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