Having an IRS tax lien on your credit record can be devastating. Because it can stay on your record up to seven years after you pay off or settle the amount, you may have a difficult time getting financed for loans, credit cards, and other financing.
When you owe a debt to the IRS, you have every obligation to resolve it by any means possible. If you fail to pay your outstanding balance, the IRS will notify you of its intent to levy.
Before you receive this notice, however, you would do well to understand what this action could lead to and how it can impact your life. You also should learn what you can do to prevent the IRS from levying your money and your assets.
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Qualifying and Applying for a First-Time Tax Penalty Abatement
The IRS takes its obligation to collect tax revenue very seriously. Nonetheless, it may offer a proverbial olive branch to taxpayers who fail to file or pay their taxes on time.
This courtesy comes in the form of a reprieve known as a First-Time Penalty Abatement. You may take advantage of this program offered by the IRS by learning how it works and whether or not it applies to your particular circumstances.
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Owing money to the IRS can put a shadow over your everyday life. This tax debt may cause you to worry that you will lose your assets or experience financial difficulties if you are unable to pay what you owe up front.
Rather than carry around this burden, you may want to pay it off as soon as possible with your available line of credit. Before you charge it, however, you should understand the benefits and pitfalls of paying off your IRS obligation using your credit card.
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No news is generally deemed as good news when it comes to how the IRS does business. When it notifies you that you owe back taxes, however, you may have no idea how or when to respond.
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With its duty to oversee tax collections, the IRS has far-reaching capabilities to ensure that everyone pays their fair share. If you fall behind on your taxes or fail to pay the correct amount, you may expect to receive notification of your remaining tax obligation.
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From start to finish, an IRS levy can take months, if not years to complete. After it notifies you of its intent to levy your earnings, the IRS can generally continue its collection efforts until it is paid in full.
Even so, you can protect yourself financially and legally by understanding how this process works. This information will help you determine if you should appeal the levy or if you can satisfy the debt through other means.
Under normal circumstances, creditors are limited when it comes to the amount of money they can take from your paycheck after a garnishment order has been issued. However, the IRS is not bound by normal garnishment protocol and thus can garnish your paychecks without a court order and without abiding by standards to which other creditors must adhere.
Being in default to the IRS is entirely different than owing money to a credit card company or a hospital. In fact, while most creditors must obtain a court order to garnish your income, the IRS can levy your wages without one.
Wage garnishments can take away vital income that you need to support your family. Because garnishments can last for weeks or months, this legal action taken by your creditors could make your current financial situation worse and also ruin your credit.
