The reality for many Americans is that they perhaps owe more money than they would like to admit. Indeed, once the calendar turns to the first of the month, they suddenly find themselves on the hook for everything from their houses and cars to their education and childcare.
While there is certainly nothing wrong or abnormal about this, it’s undoubtedly frustrating to see such a sizeable amount of an otherwise much-needed paycheck diverted for these purposes and to have to live in fear of incurring any additional major expenses.
You can just imagine then how stressful it can be then for people in these situations to learn from the Internal Revenue Service that they owe a rather sizeable tax debt.
First and foremost, the good news is that there are several viable options for those who owe the federal government money but are limited in their abilities to pay it back.
While we’ll examine these options in future posts, it’s important to first provide some basic background information on what will happen if people decide to ignore the IRSand hope their tax debt will simply go away.
Once the IRS determines that you have a tax debt, it will mail what is referred to as a notice of assessment outlining the amount owed and requesting payment. Failure to remit payment within 30 days will result in the mailing of another notice of assessment, with the process continuing onward.
While it can be tempting for people to ignore these repeated letters, it’s important to understand that the agency will eventually mail a different letter of far greater significance — the Final Intent to Levy notice.
Failure to take any kind of action within 30 days of receiving this letter — appealing the amount, writing a check, etc. — will result in the IRS filling a lien against you, meaning they can come after everything from your bank account to your wages to satisfy the tax debt.
As we stated above, it’s important to understand that people facing a sizeable tax debt do have viable options and that they don’t have to endure the incredible stress of IRS collection efforts.
We’ll examine some of these options in our next post.
If you have questions relating to tax debt, consider speaking with an experienced legal professional who can provide the necessary answers as soon as possible.