With football season upon us, many of our readers' thoughts turn to punishing hits and concussion protocols. But let's face it: No one hits harder than the Internal Revenue Service. When the federal agency wants to punish someone, it has the power to do exactly that.
A recent article by a certified public accountant laid out three IRS collections scenarios. Of course, the agency would never refer to its methods as punishment, but ask those who have experienced the full brunt of a lien or levy to see how they feel.
The collections process begins when the tax collecting agency does not receive full tax payments on time. After two notices have been issued and the agency has not received either full payment (including interest and penalties) or an amount agreed upon with the taxpayer, the process begins in earnest.
One of the possible outcomes is a federal tax lien and a notice of a federal tax lien.
The lien is a legal claim against your property, the CPA notes. And it includes your house, your vehicles and your bank accounts. A lien will prevent you from selling your property or doing anything else with it. Note: a lien can also attach to your business property and assets.
The notice of the lien is when the IRS tells creditors of the lien and goes out to credit agencies, among others. The effect can be that you are no longer able to get credit.
Another collection scenario: levy, which is a seizure of your property. Once seized, it is then sold off to pay your tax debt.
If you face one of these possibilities, you can speak with a Cleveland or Chicago tax attorney experienced in helping protect taxpayer rights and property.