When I was a field agent for the IRS, I never went into the field over the holidays, especially during Halloween. Can you imagine the awkward conversation I’d have with people who thought it was just a Halloween prank when I asked to come inside? Unfortunately, what the IRS can do when they get mad is a lot scarier than any joke played by the neighborhood kids.

Your Account Becomes Delinquent

If you fail to respond to a bill sent by the IRS, your account is considered delinquent. If the debt is small enough, it’s sent to the IRS’s automated collections system, or ACS. Representatives from the ACS will try a variety of methods to contact you, including by phone or mail. It’s important to note that ACS agents aren’t well-trained in tax law, and their primary objective is to collect as much money as possible.

Filing a Tax Lien

If you can’t fully pay the IRS, they may file a federal tax lien. A lien is a public notice to all your creditors and is registered with the county you live in or conduct business. A lien can drop your credit score quickly, and if you try to sell any property while you have a lien, the IRS has first rights to all proceeds. Once the claim is in place, the IRS won’t release you from it till all debts, including penalties, are paid in full.

A Chance to Make Your Case

In the 30-day window between when the lien warning is first issued and when the IRS actually files it, you can request a hearing with the office of appeals. To request a hearing, you have to file Form 12153, Request for a Collection Due Process or Equivalent Hearing. The form requires some basic information along with reasons why you believe the IRS shouldn’t pursue the lien or levy on your property. However, the deadline is strict, and failing to file the form properly will result in its immediate rejection by the IRS.

IRS Debt Collection, Wage Garnishment and Property Seizure

If you haven’t been successful in setting up a proper payment plan or failed to meet the 30-day window to request a hearing, the IRS will start the collections process. The IRS typically will start levying your income or assets like your bank account. If you see a levy on your bank account, the IRS will be taking money directly from your accounts to help satisfy the debt accrued.

It’s not just your income that the IRS can garnish; if you’re married, they can also garnish the wages of your spouse. This can make bill due dates, like rent, car payments, and even day care, a terrifying time. If you’re a business owner, a levy on your business bank account means that your employees’ paychecks may take a serious hit.

The IRS may seize vehicles, boats, and other property; anything you own with high monetary value can be taken to make up the debt. They will approach your place of business or home and request to come inside. If you say yes, they will seize anything that is worth money. If you decline, they will obtain a writ of entry, which gives them the right to take any property on the premises to satisfy your debt. If there has been a considerable lack of communication, the IRS will levy everything at once as the last-ditch effort to gain your attention.

If your debt is upward of $50,000, they can also revoke your passport.

Get Help Today

The good news is if the IRS knocks on your door this fall (or any season), you have the right to have an IRS professional guide you through the process and advocate on your behalf. If you need someone on your side this frightful season, never hesitate to reach out. Contact us anytime; we’re here to help!