Believe it or not: The IRS has more power than you think. Refuse to pay, and you run the risk of forcing the Tax Man to resort to brutal weapons: The IRS Tax Levy, IRS Tax Lien, and IRS Asset Seizure.
IRS Tax Levy: What to Expect, and How to Stop it
There are two types of IRS Tax Levy, the IRS Wage Levy and the IRS Bank Levy. The IRS will access the debt owed, then send notice of your Tax Debt and a demand for payment. If you ignore this letter, the next letter sent out will be "Final Notice and Intent to Levy". From here, the IRS can yield whichever IRS Tax Levy weapon it desires. The IRS can seize all the funds from you bank account with an IRS Bank Levy, and they can take funds directly from your salary with an IRS Wage Levy (Or IRS Wage Garnishment).
Stop an IRS Levy: The IRS only enacted the Tax Levy because you refused to pay your Tax Debt. If you voluntarily comply and work with the IRS to make a payment arrangement, the IRS should work with you. It won't be easy, and you likely won't get the payment arrangement you want, but it's better than the constant fear of wage levies or garnishments.
IRS Tax Lien: What to Expect, and How to Stop it
IRS Tax Liens are a default when you owe Tax Debt. When you owe a Tax Debt, you have a Tax Lien by definition. Tax Liens simply don't become an issue (or even known to the taxpayer) until the IRS notifies your creditors about the Tax Debt. Suddenly your credit is shot and you can't do anything involving credit.
Stop an IRS Tax Lien: An IRS Tax Lien is there until your tax debt is paid in full. Even when you're making payments, the Lien remains. The IRS does not want to remove a Tax Lien, it's an excellent incentive for you to pay your tax debt. However, you can have a Tax Lien temporarily lifted if you can prove that the Tax Lien is stopping you from paying your tax debt. Show the IRS that the Tax Lien is preventing you from selling your home or getting loan to obtain money to pay off your tax debt.
IRS Asset Seizure What to Expect, and How to Stop it
IRS Asset Seizure: IRS Asset Seizure is the IRS' last resort for collecting on Tax Debt. The IRS sends armed agents to your home with trucks, then they proceed to seize everything of value. They'll take the extra cars, antiques, family heirlooms, anything that can be liquidated to pay for your tax debt. They won't take your only home and they'll leave the clothes on your back, and that's about it.
Stop an IRS Asset Seizure: You have an advantage, the IRS does not want to seize your assets. They do this because you refuse to pay them and they can't reach an agreement otherwise. They seize assets you bought with "Stolen Money" from the government (that's how they see it) and now they want it back. The best was to stop an IRS Asset Seizure is prevention, don't let it get this far. Find any way to pay on the tax debt.
It's hard to get your head out of the sand and face the IRS. But picking up the phone and giving them a call is better than inviting the worst case scenario. If you've received an IRS notice, don't hesitate. Resolve the issue today.