Far too many people underestimate the IRS for its ability to follow through and get that last dime from them. The ‘IRS’ might as well stand for ‘is really serious,’ so the way you handle your taxes should be serious, too.
They won’t pull the rug out from underneath you, though. You will get a notice and demand for payment, a notice of intent to levy, and a notice of a right to a Collection Due Process hearing. These will come in the form of five letters that is often referred to as the ‘notice stream’. If you don’t pay the balance or arrange to pay the balance by the time you get the last notice, the levy could be issued. The IRS will garnish your wages. Remember that ‘really serious’ part? The IRS issued 3 million in levies in 2012 alone.
What can you do? There are steps you can take to have the levy lifted but we recommend doing one better – don’t get the levy in the first place. Ahhh, the power of prevention. Even if you are in dire straits, there are things you can do to keep this from happening. Read on for more about how to prevent a tax levy.
Get Confirmation; Then Negotiate The first thing you need to do is make sure the IRS didn’t make a mistake. Hey, it’s rare but it does happen. If you’ve been able to verify your balance, it’s time to negotiate. It is possible to contact the IRS and come up with a payment arrangement. Figure out what you can pay and go from there, securing the help of a tax professional if you need to. Monthly payment installations can be arranged. As long as you make the monthly payments, the levy will be deferred and likely canceled altogether.
This post was published at Deviant Investor on December 26, 2017.