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Archive for the ‘Tax Debt’ Category
IRS Notice CP 2000: What It Is and What to Do If You Get One
The idea of receiving IRS notices worries most taxpayers. They fear that they have a tax debt or have been selected for an audit. The fact is that the IRS sends notices to share information as well, even when they are not required to act. Notice CP 2000, however, requires action. Why Would I Get Notice CP 2000? By sending Notice CP 2000, the IRS is informing you that they compared information on your tax return with ...
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IRS Notice CP90: What It Is and What To Do If You Get One!
Taxpayers receive Notice CP90 Final Notice of Intent to Levy and Notice of Your Right to A Hearing when they haven’t resolved their back taxes after repeated reminders from the IRS. CP90 informs them that the IRS intends to levy certain assets to pay for the delinquent taxes. Under a levy, the IRS sells the property and/or assets to pay for the back taxes. It is one of the most damaging IRS collection ...
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Common Causes of Tax Debt
Taxpayers do not always wind up with a tax debt because they do not pay their taxes on time. In certain instances, a tax debt may come as a surprise. To better understand what to expect, consider these common causes of tax debt: Non-Payment of Taxes A common cause of tax debt is not paying what is owed before the filing deadline. If a taxpayer does not pay their entire tax bill during the filing period, the ...
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Frivolous Tax Arguments
Some taxpayers who are in tax debt try to avoid paying what they owe by using arguments that are not reasonable. A common example of a frivolous tax argument is that you don’t believe in taxes. Such arguments, when presented before the court, do not stand up, and therefore, should be avoided in the first place. The Right to Challenge The IRS Every taxpayer has the right to contest their tax liabilities and challenge the IRS in ...
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IRS Penalties and Interest
If you owe back taxes, your balance steadily grows each month that it remains unpaid. After the filing deadline has passed, the IRS will begin to charge both penalties and interest on the amount owed. These charges can quickly increase your balance. The IRS stops charging penalties and interest only after you have resolved your tax debt permanently or the entire tax debt is forgiven. There are two types of penalties charged on a tax debt, ...
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What is Wage Garnishment and What Can The IRS Take?
Wage garnishment allows the IRS to collect back taxes from individuals by taking money from his or her bank account or wages. If a taxpayer has the financial ability to pay and ignores or refuses to pay the tax debt, then the IRS can use garnishment to satisfy the tax debt; this can be partially or fully, depending upon the taxpayer’s financial condition. Before using garnishment to satisfy a tax liability, the IRS sends multiple ...
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The IRS Collections Process – What Happens When You Don’t File and Pay Your Taxes
If you do not pay your tax liability before the filing deadline, the IRS treats the taxes owed as back taxes. If you are required to file a return and you do not file, even if you do not owe, the IRS will charge a failure-to-file penalty for non-compliance. If, on the other hand, you file your tax return but do not pay your taxes in full, then the IRS will charge a failure-to-pay penalty ...
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What is a Tax Lien and Why Should Anyone Care?
Lien and levy are two terms the public hears quite often and typically within the same sentence. While both are collection measures taken by the IRS, they are very different. A levy often results in a taxpayer’s money being taken from his or her wages or a bank account. This is a simple enough concept to grasp. Liens, on the other hand, are very rarely understood by even those who have one placed against ...
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The Truth About Bank Levies
A bank levy is a seizure of liquid assets from a financial account by the IRS on an individual who has either ignored their tax debt or is delinquent with a formal payment agreement. The amount seized can be up to the full amount of the debt owed and can be taken from any financial account that has the debtor’s name on it. If, for instance, the taxpayer’s name is on a parent’s bank ...
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