Dealing with the Internal Revenue Service is often nerve-wracking. Even if taxpayers do their best to file their taxes correctly, they may still worry about making mistakes and facing the wrath of the IRS. In some cases, New York residents may end up facing collections from the IRS for unpaid taxes.
When the IRS believes that a taxpayer has an outstanding balance, the agency will notify that person by mail. The letter will detail the balance, penalties and fees, and demand that it be paid in its entirety. Of course, not everyone has the ability to pay outstanding tax balances in full, which could cause them to panic. However, there are options that struggling parties may be able to take advantage of, such as installment agreements or an offer in compromise.
It is important to remember not to simply ignore a letter from the IRS, even if a person thinks it is a mistake. The agency can garnish wages and seize retirement income, social security benefits and funds from bank accounts. As a result, it is important that parties address a collections letter as soon as possible.
If New York residents do believe that they received a collections letter from the IRS in error, they may find themselves in a difficult spot. In some cases, parties may need to go to court in order to prove that they do not owe unpaid taxes, which can be complicated. Fortunately, concerned parties can discuss their options with attorneys experienced in tax laws who can help address such errors and other issues involving the IRS.