What Can You Do About An Overdue Tax Debt?
Posted on: 15 March 2017
An unpaid federal tax debt is not one that you should or can ignore. Unless you take action, the Internal Revenue Service (IRS) will find a way to receive payment for a tax debt. If you have an unpaid tax bill, here is what you need to know.
What Are the Potential Consequences?
The IRS has various tools at its disposal to collect the funds owed on a tax debt. One of the most commonly used is a tax lien. The lien is usually the first step and gives the IRS a legal claim to any assets that you have. If you receive notice that the agency is placing a lien on your assets, you have options for removing the lien before any legal actions are taken by the agency.
Another possible option the IRS can exercise is a wage garnishment. With a wage garnishment, the IRS would take a certain percentage of your earnings from your pay before you receive it. A garnishment can not only impact your ability to pay your bills, but it can appear on your credit report. You could experience troubles with receiving credit in the future.
One of the more severe ways that the IRS has of collecting unpaid monies is to place a levy on your assets. Once a levy is placed, the agency can seize your assets with short notice. If you have been warned that the IRS is going to place a levy on your assets, you must act quickly.
What Are Your Options?
It is important that you do not delay once you receive notice from the IRS that the agency is considering action against you. If you agree with the amount that the agency is claiming you owe, you can contact the IRS and set up a payment plan. Before calling, know what you can pay each month towards your debt. The IRS will evaluate your payment offer and decide whether or not to accept it.
If you do not agree with the amount that is owed or cannot afford to pay it, you can offer a compromise on the bill. With a compromise, the IRS would agree to lower the tax bill to a lower amount, and you will be responsible for paying the full amount at that time. In some instances, the IRS will agree to installment payments.
To further explore your options for handling your tax debts, consult with an IRS solutions service. You can work with a representative to find the right option for your particular situation.
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