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How does the IRS collect overdue tax payments?

One of the guarantees of life is that you will have to pay taxes, and it is next to impossible to avoid paying them. Even if you simply fail to pay, you will face aggressive tax collection action from the IRS.

The nation’s top taxation agency is very serious about collecting money owed and will not back off easily. There are several ways the IRS can attempt to collect money when you owe back taxes.

Tax lien

The IRS can put a lien on your property at any time. If you owe taxes and the IRS places a lien and then you buy additional property, the lien will extend to that new acquisition. A lien prevents you from profiting from any sale because any money made on the property must go to the IRS and not you. It can make it very difficult to sell because most buyers do not want to deal with the lien. It will also show on your credit reports.

Notice of levy

A levy is when the IRS takes your personal assets and sells them to recoup money owed. Generally, this will apply to valuable property, such as cars, real estate and anything expensive that would turn a profit. It also includes bank accounts and wages. They can take Social Security benefits as well.

Refund offset

The IRS also has the ability to take any tax refund you may get at any level. So, if you get a state refund, the agency can take that even though it is not federal.

The IRS will come after you for money owed. You cannot get rid of tax debt through any method other than paying it, but you can work with the IRS. It is much better for you to work with the agency on a repayment plan.