4 Top Penalties You Face When Dealing with Tax Debt

two people reviewing their tax debt

If you owe taxes and you are having trouble making payments, your first instinct may be to keep your debt until it becomes manageable. However, letting your tax debt pile up as you ignore payments can result in serious consequences. The IRS can force you to pay with federal tax liens, levies, and wage garnishments. Our Tampa tax attorneys have put together the top penalties the IRS may impose if you have tax debt.

If you are dealing with overwhelming tax debt and are having trouble making payments, our Tampa tax attorneys are here to help you. Contact our office today at (813) 295-7648 to schedule a consultation!

#1: Interests Will Start Building on Your Balance

If you delay making tax payments, the IRS will charge you interest. As your tax debt starts to grow, so will your interest. The interest rate is typically 5% annually.

#2: The IRS Will Put You in Automated Collection

The IRS can impose an Automated Collection System (ACS) if you fail to make your tax payments. An ACS can issue liens and levy bank accounts and wages. The IRS will likely notify you that they will put you in an automated collection so that you are aware of the consequences if you don’t start to make payments.

#3: The IRS Can Take Your Refund

If you end up with a refund, but you still owe taxes from a previous year, the IRS will keep the refund to add it toward your tax debt. The IRS won’t ask you for permission to take your refund. They will simply notify you that your refund will fulfill some of the taxes you owe.

#4: The IRS Can Seize Your Money & Assets

Although the IRS can seize your money and assets, it’s most common for the IRS to impose wages, accounts receivable, or bank levies. The IRS can take some of your wages to pay your tax bill, or they can take the money you’ve earned as a small business or independent contractor. They can also take money from your bank account. However, if you get into a payment agreement with the IRS, they will typically stop the levy.

#5: A Revenue Officer Might Visit You

If you don’t pay your tax debt, the IRS might send a revenue officer to collect your taxes. They will usually send a revenue officer if you owe a large amount of taxes or if you owe for continuous years. A revenue officer might also show up if you have unfiled tax returns.

#6: The IRS Could Hand Over Your Case to a Debt-Collection Agency

If the IRS has been unsuccessful in collecting your tax balance, they can turn to a private tax collector to do the job. This can result in excessive and harassing phone calls.

Call Our Tampa Tax Lawyers: (813) 295-7648

If you owe tax debt that you know you won’t be able to pay back, you have options to make payment arrangements and to reduce the amount of taxes you owe. With a lawyer on your side, you will be able to carefully address the sensitive issues involved with an audit or tax problem to minimize costs, penalties, and lost time. Tax law is complex, and many taxpayers have difficulty understanding the various rules and regulations surrounding taxes. For such reasons, our team is ready to give our clients the legal guidance they need to achieve tax debt relief.

Learn more about your options by contacting our Tampa tax attorneys today at (813) 295-7648. We are here to help you obtain tax debt relief!

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