No matter how large or small the tax debt amount, the IRS has the legal right to place a tax
lien or levy if taxpayers ignore paying their debt. This is why many taxpayers live in fear
of the IRS if they have unpaid taxes. However severe the debt, the IRS does not and cannot
put a lien or a levy before sending preliminary notices regarding the tax debt to taxpayers
explaining the details of the debt and how they can resolve it.
It is only after no effort is made by taxpayers to resolve the tax debt that the IRS sends a
C-90 ‘Final Notice of Intent to Levy’ letter. This is the last IRS notice sent before the IRS
initiates collection actions.
Some of the important facts taxpayers under tax debt must consider are:
• It can take up to a few months before the IRS to place a lien or a levy after the
sending of the first notice regarding tax debt.
• Taxpayers must begin making preparation to pay back the debt after the IRS has taken
notice of the debt and sent a notice to request payment.
• The IRS can and does place a lien or levy if taxpayers ignore or avoid them.
The first tax debt notice means the IRS is aware of the debt and will eventually use
aggressive collection actions. It also means that taxpayers have time to prepare.
Instead of ignoring the notices and allowing the IRS to get stronger, taxpayers should begin
to look for ways to reduce their back taxes as soon as possible to help save money on interest
and penalties that the IRS charges on tax debt.
Many times, taxpayers do not resolve their back taxes because they do not have the money
to pay back the debt. Even though the IRS calls their tax debt resolution plans ‘payment
plans’, taxpayers may not necessarily have to pay the full debt amount or even partial tax
debt amount to satisfy their tax obligation.
The IRS is bound by rules. Knowing the rules and taking appropriate action will give
taxpayers the power to beat them.