The IRS has set the standard for how it operates to recoup the money it believes you may owe. Once they begin the process of collections, you may find yourself facing a host of issues.
With the federal government’s power at its disposal, the IRS can cast a wide net when collecting. Discover some of the ways your life may become impacted by a tax bill.
What happens to bank accounts?
One of the first actions the IRS may take when trying to collect is placing a temporary hold on your bank accounts. Doing this means you cannot access those funds until the bank receives notice from the IRS releasing it. This action allows the IRS first to get your attention and, second, stop you from liquidating money in an attempt to thwart collections. If the banks freeze your accounts, you cannot pay bills or withdraw cash.
Can the IRS dip into personal property?
When you allow proceedings to continue, the IRS may decide to file a federal tax lien against your home or other property you own. This is another measure to prevent you from selling assets for profit without paying the taxes you owe. When you sell the house, a lien means the proceeds must first go to pay off the tax debt.
The IRS may also file a levy against you that allows them to seize and sell items to satisfy your debt. A levy may apply to boats and cars, bank accounts, wages and social security benefits.
Trying to ignore the IRS’s attempts to contact you about your debt may result in serious action, such as those named above. When you first receive communication about back taxes, you may want to consult with someone knowledgeable to explore the amount and ensure that it is accurate before proceeding forward.