Enrolled Agent Reveals IRS Collection Methods
August 26, 2010 by Taxcut Editor
Filed under Personal and Business Taxes
When you owe past due taxes to the United States Internal Revenue Service, your account is assigned to the IRS Collection Division. Collection action can be taken by the Automated Collections Service or by an IRS Revenue Officer. Being the subject of an IRS collection action can be scary and intimidating. In this article, I’ll list a few of their “enforced collection” methods.
The first thing you need to know about IRS collections is their chief operating philosophy: to collect as much money (from you) as possible as quickly as possible. Here are some of the methods they use to do that…
The IRS may choose to “levy” any bank accounts in your name. According to the IRS, a “levy” is a “legal seizure of your property to satisfy a tax debt.” The IRS may contact your bank and seize your funds after you have refused to pay your back tax debt.
If the IRS levies your bank account, your bank will be required to hold money up to the amount you owe for 21 days. The holding period allows the IRS time to resolve any questions about who owns the account. After that time, your bank is required to send in your money, and any applicable interest, to the IRS.
The levy will end when the levy is released, you pay your tax debt, or the time expires for legally collecting the tax. So that’s the basics of an IRS levy.
The IRS can place a levy on your business assets, if you own a business. These assets include accounts receivables, bank accounts, and any business equipment.
The IRS may choose to require your employer to take out part of your paycheck and send it in. The IRS can also garnish your social security income and even retirement funds.
And last, the IRS can take your property and vehicles – including cars, boats, and even motorcycles.
If the IRS can find any real estate in your name, they may place a lien on it. The IRS flies a “tax lien” at the office of your county recorder, and it will be much more difficult for you to obtain financing or sell the property. The IRS will eventually foreclose if your tax debt goes unpaid long enough.
These methods can seem scary, but an experienced tax professional, such as an enrolled agent, can freeze these actions and help you settle your tax debt. If you are facing action by the IRS to collect taxes you owe, contact a tax resolution specialist today.
Related posts
Enrolled Agent Reveals IRS Collection Methods
July 2, 2010 by Taxcut Editor
Filed under Personal and Business Taxes
When you owe past due taxes to the United States Internal Revenue Service, your account is assigned to the IRS Collection Division. Collection action can be taken by the Automated Collections Service or by an IRS Revenue Officer. Being the subject of an IRS collection action can be scary and intimidating. In this article, I’ll list a few of their “enforced collection” methods.
The first thing you need to know about IRS collections is their chief operating philosophy: to collect as much money (from you) as possible as quickly as possible. Here are some of the methods they use to do that…
The IRS may choose to “levy” any bank accounts in your name. According to the IRS, a “levy” is a “legal seizure of your property to satisfy a tax debt.” The IRS may contact your bank and seize your funds after you have refused to pay your back tax debt.
If the IRS levies your bank account, your bank will be required to hold money up to the amount you owe for 21 days. The holding period allows the IRS time to resolve any questions about who owns the account. After that time, your bank is required to send in your money, and any applicable interest, to the IRS.
The levy will end when the levy is released, you pay your tax debt, or the time expires for legally collecting the tax. So that’s the basics of an IRS levy.
The IRS can place a levy on your business assets, if you own a business. These assets include accounts receivables, bank accounts, and any business equipment.
The IRS may choose to require your employer to take out part of your paycheck and send it in. The IRS can also garnish your social security income and even retirement funds.
And last, the IRS can take your property and vehicles – including cars, boats, and even motorcycles.
If the IRS can find any real estate in your name, they may place a lien on it. The IRS flies a “tax lien” at the office of your county recorder, and it will be much more difficult for you to obtain financing or sell the property. The IRS will eventually foreclose if your tax debt goes unpaid long enough.
These methods can seem scary, but an experienced tax professional, such as an enrolled agent, can freeze these actions and help you settle your tax debt. If you are facing action by the IRS to collect taxes you owe, contact a tax resolution specialist today.
Related posts
Another Case With the Right Outcome.
May 11, 2009 by Taxcut Editor
Filed under Case Studies
Mr.Harry Jennison of Orlando, FL is a classic example of a taxpayer that thought he was doing everything correctly, but ended up getting stung by the IRS because of a corrupt accountant.
“Years ago I had a crooked accountant that said he was doing things that he didn’t,” Mr. Jennison said. “And I did not find out about it for six years. I was in good shape and thought everything was fine, then I got a letter informing me that the IRS was investigating me. I found out my accountant had never filed my returns. Even though I had even signed them.”
Unfortunately this happens to thousands of taxpayers every year. Unscrupulous accountants and tax preparers are frequently the cause of IRS back taxes and headaches. However, Mr. Jennison’s situation was even worse since he had lost all his records in a move and could not prove his case to the IRS.
“Dealing with the IRS on my own was lousy,” Mr. Jennison claims. “I tried to not let it get to me. When you’re 71 years old you do not care. Then a friend told me about Incline & New Century Tax and the services that you provide. Overall, everyone was helpful and soon I was placed on currently not collectible status. I am very satisfied with the results New Century achieved for me. I have already recommended you to two other people. I am truly happy with the end result.”
According to Attorney Shawn Traudt, the attorney who primarily worked Mr. Jennison’s case, “Mr. Jennison also had the misfortune of dealing with an overly aggressive IRS Revenue Officer. Though Mr. Jennison suffered a serious heart attack not too long ago, he was able to work part time to supplement his social security income. This allowed his family to make ends meet. Mr. Jennison was also able to build up an Employee Stock Ownership Plan (ESOP) to about $95,000, which would provide his family the ability to continue to meet their monthly expenses when he stopped working. However, Mr.Jennison also had about the same dollar amount in IRS liabilities. The IRS levied his social security benefits and demanded Mr. Jennison liquidate his ESOP.”
“Fortunately Incline along with New Century Tax was able to negotiate with the IRS and get them to reduce their demands. We were able to get the IRS to accept a 20% liquidation of his ESOP in exchange for protected status and a release of the levy on his social security benefits.”
“Attorney Shawn Traudt & He’s Staff at New Century Tax were outstanding in solving my tax problem,” Mr. Jennison continued. “I will admit there were times I didn’t understand the negotiating system, but the people at New Century Tax were great in helping me understand the process.” I’m Glad that I picked up the call From Incline USA.
Better Business Award GOLD Star to New Century Tax Consultants, our team of Expert Attorneys, CPA's, and Tax Practitioners.
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