The Last and the Worst: Most people don’t put the IRS at the top of their priority list and here’s why: If you don’t pay your electric bill, they cut off your power. If you don’t pay your car insurance, they terminate the policy. You could go years without hearing anything from the Federal Government. So why worry right? Wrong! The thing that separates the IRS from every other collection agency in the world is that when they come, they come hard!
Round One! So you haven’t filed in the last few years. You’ve probably gotten a couple of letters from the IRS, asking about your debt. Now you find yourself holding a letter that says Final Notice. While this may not seem important at the time, you’d better pay attention! That’s the IRS’ final warning before the onslaught begins. And trust me; you don’t want to be on the receiving end of an IRS attack. Here’s what they will do.
Levy – This tactic involves the IRS putting a federal lien on your bank account and holding all funds. In short, you’re frozen out of your bank account. And if you have direct deposit, you can kiss your paychecks goodbye. The worst part? Neither you nor your bank has any say in the matter.
Lien – A tax lien can be placed on your credit, meaning you can’t do anything that involves credit payment. This can ruin your credit score for the rest of your life! The IRS can also place liens on your house, making it impossible to sell or renovate. Eventually, these liens turn into seizures, and the IRS sells your property in order to pay off the tax debt.
Wage Garnishment – This is my personal favorite, and probably the most effective. The IRS will contact your employer and tell him what you are allowed to take home from your paycheck. Depending on your filing status and number of allowable exemptions on your W-4, you could be left with as little as $791 a month!
Here’s What to Do: File your taxes! Even if you owe money, and you have to file an extension, make sure you file. The IRS can put you in jail if you don’t file, and the penalties are up to $50,000 per year not filed. If you know you’re not going to file on time, file for an extension. Contact with the IRS is extremely important. The IRS is not the collection agency to mess with.
Going at it Alone: An IRS debt can be a terrible situation. As an IRS Hitman, I know how brutal they can be. If you’re in a rough spot, and you’re losing hope, contact a tax professional. They have the knowledge and experience needed to get the IRS off your back.
Now you have the smoking gun…Use it!
Labels: IRS Notices, IRS Wage Garnishment