If you receive a Bill from the IRS and you ignore it, the amount you owe will continue to grow. IRS may take action to collect the amount due like attaching your bank account or garnishing your wages. The IRS will take the necessary steps to collect its debt. They are:
- Contacting third parties for information regarding your assets.
- Filing a Notice of Federal Tax Lien – which provides notice to the Public, including potential creditors of the Government’s legal claim to your property,
- Issuing a Levy – which allows IRS to take legal action by taking assets, like funds from the Taxpayer’s bank account. The Levy also includes seizure and sale of real property, vehicles, business inventory, equipment, etc. Property is sold and the proceeds are applied to the taxes due.
- Garnishing Wages – the Employer will pay a portion of the Taxpayer’s salary directly to the IRS in order to comply with the Levy. Accounts Receivables due to Taxpayer and Rental Income due to the Taxpayer can also be levied.
- Serving a Summons – the Taxpayer can be served with a summons as the person responsible for the tax liability to bring in documents and records to assist in the preparation of a financial statement to determine the Taxpayer’s ability to pay. The Taxpayer might have to bring in Books & Records for the IRS to use to prepare an unfiled tax return. IRS can also summon other parties for information needed to collect or determine tax liability. Third party summons could include summoning financial institutions, third party record keepers or those not able to comply with an informal request for information. IRS can summons anyone with information that might be relevant to the case. If a Taxpayer fails to appear before IRS after a summons is issued, other legal actions can be taken against the Taxpayer. Civil enforcement of the summons will require the Taxpayer to appear before court or a judge.
IRS will take all actions necessary to collect the amount that the Taxpayer owes. Penalties and interest will continue to be added to the amount owed. An IRS Collection Agent could also show up at the Taxpayer’s home or place of business.
Don’t be a victim of your own making. Don’t ignore an IRS bill. Contact your tax specialist if you receive an IRS Bill.