Sarasota Personal Injury Lawyer

The IRS is infamously known as persistent when it comes to collecting a debt. If you are indebted to the IRS, they have the right to put a lien or levy against your income and assets until you are paid in full. They also obtain the right to confiscate your property and use it to fulfill of your remaining debt. The consequence of this is that it can damage your credit, reputation, income, etc.

IRS Tax Liens
Any taxpayer who is indebted to the IRS is at risk for having a federal tax lien placed on their property. The lien is put in place to secure the IRS’s interest in the property and can only be really after the entire debt is satisfied. Having a tax lien placed on the property makes it difficult for you to take out a loan on the mortgage and can possibly interfere with the possibility of selling the property. The lien can also damage your credit and you may struggle to pay your tax debt or any other debt.

IRS Tax Levies
Another tactic the IRS uses during collections is a tax levy. A person who has debt with the IRS can possibly have any levy plays against their property, including any personal property, bank accounts, wages, investments, and/or wages until the debt is satisfied.

IRS Offers In Compromise
There are certain circumstances where the taxpayer’s debt is too large for the taxpayer to satisfy in full. Even under these certain circumstances the IRS will still try to collect the full amount. However, there is an option to resolve the problem by making an Offer in Compromise. This works by allowing the taxpayer and the IRS to settle the debt with terms that allow the taxpayer to pay less than the full amount.

The benefit is that any collection activities such as placement of levies or liens are placed on hold while the compromise is being negotiated, and will remain on hold as long as the taxpayer follows the agreement. However, this program is available to businesses and individuals who meet the qualifications. A majority of the time the IRS will agree to an Offer in Compromise when there is proof that the taxpayer cannot meet his debt requirements.

Installment Agreements
In the situation where the taxpayer owes more taxes than is possible for them to pay upfront, the IRS is usually cooperative in entering and Installment Agreement that allows the taxpayer to make monthly payments. With this option the taxpayer must agree to pay the full tax amount in payments over a period of five years or less. This option is usually available to individuals as well as businesses.

In order for the IRS to establish how much the taxpayer can afford to pay per installment until the debt is satisfied, they will perform a detailed investigation of the taxpayer’s financial situation.

Additional Legal Information: For more information regarding tax collection please visit the Thorn Law Group