One of the most dreaded things is to be in extreme debt. And one of the worst creditors you can have is the IRS. The IRS has at its disposal the full power of the law and might of the government behind it. The IRS can levy your property, place a lien on your assets, garnish your wages, freeze your bank accounts etc. if you owe them money. So you have an IRS Problem, what can you do about it?
First, you must file your tax return. This will minimize your debts because it prevents the government from filing a substitute return on your behalf. A substitute return is one that does not have any deductions and is designed to maximize your tax liability based on your latest known income. Click here to watch or read more information on IRS Back Taxes.
If after the IRS files a substitute return and you still do not pay up, then the IRS will take extreme actions to collect on your overdue taxes. They start off by levying your bank accounts. Once this happens, your accounts will be frozen, you will not be able to withdraw funds or pay for anything and you will be responsible for all bounced checks out of those accounts. After 21 days, the bank has to transfer the funds in your accounts to the IRS to pay your back taxes.
The next thing they do would be to garnish your wages. However, before the IRS takes this step, they will send you a letter called a Final Notice informing you of their impending action. After that comes a 45 days waiting period before taking any further action. Any time after this 45-day period has elapsed the IRS will begin wage garnishment. Don’t be surprised months or even years pass after the Final Notice is sent before the IRS starts to garnish your wages. It is also not surprising that some taxpayers never receive the Final Notice because the IRS sent it to an old address.
The amount garnished does not depend on any percentage or the amount of your wages. It depends on how much you owe. Generally, the IRS will garnish your wages and leave you a minimum survival amount each month. Thus, two persons who earn different salaries can be left with the same amount after garnishment because of differing tax liabilities.
So before your situation gets to this stage you should contact the IRS directly. The IRS may reduce or waive penalties due to extenuating circumstances like a death in the family, serious illness or any other “reasonable cause.”
The best thing to do to deal with extreme IRS debt would be to consult a tax attorney. Call us at (813) 229 7100 for a free consultation on how to overcome your tax debt.