Stop screwing around! Before the IRS makes you a target, they send you a couple of letters. Most people who are in debt make the mistake of ignoring any letters the IRS sends. Take action before you receive a third letter from the IRS. Why the third letter? That is the "intent to levy" letter, and that's when the IRS owns you. And how can the IRS own you?
Have you been saving for anything lately? Maybe you were putting money aside for a vacation, or even your retirement. Remember that Uncle Sam wants you... to pay him his money first.
Here's what happens with a bank levy: you go to the store and try to use your debit card. It gets declined. You try to use again... it's declined again. You're sure you have money in the bank, so you call them. The bank has the pleasure of informing you that the IRS has seized your accounts. You can't access your funds: not for groceries, not for rent, not for anything.
Home Sweet Home... The IRS can also put a lien on your home. In short, you can't refinance, take out a loan against the equity, or even get the city permits to make improvements. When your home has a lien, you are in double trouble. Even if you have equity in your home, you couldn't take out a loan to pay off the debt. So we would go after their bank accounts or wages. It really is a vicious circle.
We're not done yet... and for now, for the last trick. Not only could I take the money from your bank and put a lien on your home, I could put a tax lien on your credit. A tax lien will cripple your ability to get a loan for anything, and can cause you to lose your job in some fields. I would hear people beg to have that lien lifted because they would get fired. I would tell them if they wanted the lien off of their credit, they needed to pay the debt. And that's the rub; a lien on your credit only comes off after you've paid the debt in full!
What can I do, Hitman? Unlike some of the IRS's other collection actions, there isn't much you can do with liens and levies until you pay that debt; or the IRS gets it out of you. Don't make the common mistake of so many tax debtors. Now that you know what will happen, don't wait for that third letter.
Labels: Back Taxes, IRS Bank Levy, IRS Notices, IRS Tax Lien