What's The Tax Collection Procedure?

If you're receiving IRS collection notices, then you must know that your IRS problems have grown. If you have a tax bill that has not been settled in full, you would be experiencing firsthand how the IRS's tax collection procedure works.

The IRS collection procedure starts with a bill showing the interest and penalties added on top of your unpaid taxes and won't cease until the bill is paid in full.

Settle your liability in full if you are able and your IRS problems will be over. Obtaining a cash advance from a credit card or obtaining a bank loan might be better ideas if you can't settle your tax liability as the interest on these are lower than the penalties and interest charged by the IRS.

If you can't settle your tax debt in full, settling even a part of it will significantly lessen your debt and, in turn, lower the penalties added and interest accrued. You may wish to think about other options if you cannot settle in full. It may be an Offer in Compromise or OIC, or an installment agreement. Whatever option you decide on to assist you with your IRS issues, make sure you let the IRS know you're trying. Enforced collection actions will be kept up by the IRS if you don't.

The IRS can utilize these methods of enforced collection actions to warrant payment of your taxes:

• Federal Tax Lien Notice
• Notice of Levy
• Offset of a Refund

Notice of Federal Tax Lien

Properties you purchase can be claimed by the IRS with a lien. Until the debt is paid in full, the lien will not be released, so it'll stay on your credit report, harming your credit rating.

Levy Notice

The IRS can take your assets to pay off your liability by a levy.

Offset of a Refund

If you need to pay tax liability but are expecting a refund, it can be used to offset the amount you owe.

If you believe that your bill is in error, you can submit a dispute in writing, including your reasons and including a copy of the IRS notice you were served.

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Originally posted 2008-01-24 05:10:32. Republished by Blog Post Promoter

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