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IRS LIENS (You Lose Your Credit)
Federal Tax Liens will make your life miserable.
Federal Tax Liens are public records that indicate
you owe the IRS. They are filed in the county where
you live or have your business. They go on your
credit report, making it difficult to finance a
car or a home. You cannot transfer a clear title
to your house.
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IRS
LEVY (You Lose your Money)
A levy means you just lost your money from your
bank account or your paycheck or your account receivable.
An IRS levy is the act of seizure of your money by
the IRS from someone else. The person, company or
bank on whom the IRS serves the levy must comply or
face their own IRS problems.
An IRS bank levy is only for the particular day
the levy is received by the bank. The bank is required
to remove whatever is in your account that day (up
to the amount of the IRS levy) and send it to the
IRS in 21 days unless notified otherwise by the
IRS. This type of levy does not affect any future
deposits made into your bank account unless the
IRS issues another Bank Account Levy.
An IRS Wage Levy keeps going from paycheck to paycheck.
It is filed with your employer and remains in effect
until the IRS notifies your employer that the wage
levy has been released. Most wage levies will take
so much money from your paycheck that you won't
have enough money to live on. The additional paperwork
will irritate your boss.
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WAGE GARNISHMENT (You're working
for the IRS now)
The IRS wage garnishment is filed with your
employer. Your boss is required to collect a large
percentage of each of your paychecks and pay it
to the IRS until it is fully paid or the IRS agrees
to release the garnishment. Your payday is now a
payday for the IRS.
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IRS PENALTIES (You Get Punished)
The IRS penalizes millions of taxpayers each
year. They have so many penalties that it's hard
to understand which penalty you've received.
When you do not file and do not pay your tax liability
it increases by 50% in a short period of time. To
make matters worse, the IRS charges you interest
on penalties. IRS interest is compounded daily and
you have to pay income tax on any penalty you do
pay the IRS. You might find out about the IRS problems
years after they have occurred, when they are full
grown monsters.
Some IRS penalties can be as high as 75%-100% of
the original taxes owed. Even if you could pay the
taxes owed, the extra penalties make it impossible
to pay off the entire balance.
The
IRS imposes penalties to punish taxpayers and keep
them in line. The IRS does forgive penalties. Before
you pay the IRS any penalty amounts, you may want
to consider requesting the IRS to not punish you
because it wasn't your fault.
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AUDITS(Finders, Keepers; Losers,
Weepers)
The IRS can audit you by mail, at their offices
or at your place. A "mail" audit may be
just for missing documents. An "at their office"
audit will be more documents plus demands for explanations.
The IRS is looking for unreported income or improper
deductions. An "at your place" audit will
be done by highly trained Revenue Agents and often
gets expanded to other tax years and many more problems.
While at your place, a "lifestyle audit"
also occurs. Audits are serious business. Always
get professional help.
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PAYROLL TAX (You Lose Your
Business)
The IRS wants past due payroll taxes paid.
The penalties assessed on delinquent payroll tax
deposits/filings will choke a horse. How you handle
the IRS agent will determine whether you stay in
business or are liquidated by the IRS. The continued
non-payment of employees' withheld income tax is
a crime. Do not meet with any IRS representatives
about payroll taxes until you have met with a professional
to discuss your options.
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IRS SEIZURES (You Lose Your
Property)
A seizure means you just lost your property
like your business equipment or inventory or your
land or your boat or your house. The IRS has extensive
powers when it comes to Seizure of Assets. Those
powers allow them to seize your property and to
sell it. This happens if you keep avoiding the IRS.
The IRS seizure is the ultimate act of their collection
efforts.
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UNFILED TAXES (You Lose Your
Freedom)
Failure to file tax returns may be a criminal
act punishable by one year in jail for each year
not filed. The IRS may file "SFR" (Substitute
For Return) Tax Returns for you. This is the IRS's
version of an unfiled tax return, which is actually
an inflated tax assessment against you. You always
have the right to file your own return, no matter
how late it is. You don't go to jail when you can't
pay, but you might if you don't file.
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