Putting it off: So you received that notice from the IRS in the mail a few weeks ago? No big deal right? Wrong! Because the next notice you get from the IRS, is not going to be a pleasant one. After you receive your initial notice of your debt, if you do not contact the IRS within the allotted time, drastic measures will be taken. A “Final Notice” will be issued and you will have ten days to either pay off the debt in full, or arrange a payment plan. If you do not, here’s what will happen:
Wage Garnishment: Imagine your paycheck is $1,000 dollars per week. Well guess what? Because of your delinquent debt to the IRS, it’s now $250 dollars per week. You heard right, the IRS will legally extract up to 75% of your weekly paycheck in order to pay your debt. That could make the difference between you getting a weekly paycheck, and a weakly paycheck.
Bank Account Levy: This is as scary as it sounds. If payment arrangements are not made and the debt continues to grow, the IRS will place a levy on your bank account. This means that all of your financial assets will be frozen! Picture having to fill up your tank when you’re taking the kids to school one morning and having your debit card declined. Even worse, the bank has no more say than you do in the matter: your account will belong to the IRS.
Liens: A lien is when the IRS swoops down onto your personal assets: your car, boat, or even your house. Initially, they will hold title on the property until the debt is paid. Eventually, they will fully claim the assets and auction them off to make payment on your debt.
S.O.S. The best way to avoid these measures is to be proactive. Stay on top of your debt, before you wind up under it. When you get that first notice, that’s your red flag that you need to do something about your tax issue. There are many ways of going about resolving your issue, and it’s important that you find out which one is best for you and that you take action.
Am I too late? It’s never too late for you to take action against your tax issue. Whether you’re $4,000 or $1,000,000 dollars in the hole, none of these options above sound good. No one wants to wake up and worry about getting half a paycheck, not being able to feed your children, or not being able to sell your own house! Wherever you stand, put up your dukes and fight back against your issue!
Now you have the smoking gun…Use it!