The IRS announced in 2011 that it would ease rules on tax liens, so as to ease some of the financial burden of taxpayers. This may make the IRS sound kinder and gentler, but taxpayers should not forget that the IRS has a duty to enforce tax payments. A taxpayer having a hard time paying the tases might improve their chances of settling the debt if they first contact an IRS tax attorney.
When taxes aren’t paid, the Internal Revenue Service first sends the taxpayer a bill. If that doesn’t bring payment, a form letter is sent out, together with an invoice demanding payment. By the time this happens, interest and penalties have accrued, increasing the tax burden even more.
If the taxpayer still doesn’t pay, the IRS can file a Notice of Federal Tax Lien. This lien gives the IRS the legal claim to the person’s property as a payment for the debt. This lien is the first step to try to acquire all the money the taxpayer owes.
The tax levy is another step in the tax collection process. After receiving a thirty-day warning, the taxpayer is served with a Notice of Levy. Using this levy, the IRS starts to seize assets belonging to the taxpayer. The most common type of levy is wage garnishment, followed by the bank levy where money is taken out of the person’s bank accounts. Other vulnerable assets include homes, vehicles and 401k accounts.
Before paying the amount owed, it is best to consult a lawyer. The tax lawyer may be able to help settle for less than what is owed the IRS or can possibly get penalties removed (abated). With help from their attorney, the taxpayer will collect documentation, file tax returns and arrange for paying their tax bill, either as a lump sum or on an installment plan.
The attorney may also be able to obtain an abatement of penalties. There are several circumstances that could secure an abatement, including major family problems, illness or incarceration. Lengthy unemployment, bad advice from a tax specialist, or harm from an act of God are also reasons for an abatement. Those whose spouses have created a major tax liability can be helped to obtain Innocent Spouse Relief by their attorney.
Most taxpayers delay seeking the assistance of an IRS tax attorney. While they wait, penalties and interest keep growing. Liens and levies may start piling up, and their credit record gets shattered. Using a legal advocate will help you through these tax problems, and may even help you pay less than what’s owed.