IRS Collection Process

It can be a daunting experience if you have not paid your income taxes and the IRS is trying to collect taxes it claims are owed by you.  The IRS has a number of weapons at its disposal to collect tax it says you owe.  The process starts when the IRS sends you a bill for unpaid taxes.  The bill will include the amount of tax the IRS says you owe and will include any interest and penalties assessed on the amount due.  If you don’t pay that bill, the IRS will send you a second bill.  If you don’t pay that bill, the IRS will start other procedures to collect the tax.

One option the IRS has is to file a Federal Tax Lien.  This is a legal claim against all your current and future property.  The lien actually comes into existence automatically after you fail to pay your first tax bill.  The property subject to the lien can be any property you own or might receive, such as a house, car, bank accounts or even wages.  The IRS also files a Notice of Federal Tax Lien, which is a public notice to creditors that you owe, and have not paid, federal taxes and that the IRS has placed a lien on your property in order to collect the tax.

A levy or seizure is another way the IRS seeks to recover taxes due.  The IRS is required to send notice before they seize property to pay taxes.  They do this through a Notice of Intent to Levy and Notice of Your Right to a Hearing.  Once they send these to you the clock starts to tick for 30 days. If you have not taken steps to work with the IRS to resolve the tax debt, they will seize your property, sell it, and use the proceeds to pay down the tax debt.

The IRS can also issue a summons.  This is not a collection process for money.  Rather it applies to collection information.  The summons will require you (or a third party) to meet with the IRS and provide them with information, documents or testimony about a specific tax matter.

If you have received a notice, levy, or summons, there are a steps you can take to protect yourself.  These include options such as appeals, offers in compromise, extension of time to pay, installment agreements and delaying the collection.  An attorney experienced in handling IRS collection actions can assist you in this process and help minimize the consequences to your life.

If you have received a notice, levy or summons and want to discuss you options then schedule your free consultation by calling (480) 888-7111 or submit a web request here.