Find Tax Debt Relief Advice Here If You Owe IRS

Taxpayers will face penalties in the United States for failures relating to federal, state or local tax issues. The Internal Revenue Service (IRS) is the body who oversees these penalties at the federal level and can only assert those penalties specifically imposed under the federal tax law. Tax debt payment failure penalties could range from monetary or even asset forfeiture. It may even lead to conviction which may include jail term for offenders. It can also apply for filing incorrect tax returns. In all, a taxpayer will face a whole lot of consequences for failure to pay taxes and that is what this article will look at.

Part 1: IRS Penalties for Failing to Pay Tax
Part 2:Tips You Should Read In Case You Can't Pay

Part 1 IRS Penalties for Failing to Pay Tax

Enforced Action Collection:The IRS is expected by law to enforce action collection if you fail to pay your tax debt. The enforced action collection could include issuing a notice of levy on your income, salary, bank account or even property. Accessing a trust fund recovery penalty or even issuing summon to the taxpayer to determine the taxpayer ability to pay.

Federal Tax Lien: It is important to understand that Federal Tax Lien is a government legal claim against your property when you fail to pay your tax debt. The lien will protect the government interest in all your property like personal property, financial assets and real estates.

The federal tax lien will be applicable after the IRS has accessed your liability by putting your balance due on the book and issuing you a notice of demand for payment after you have refused to pay your tax debt. At this point, the IRS will file a public document which is the Notice of Federal Tax to alert creditors of the government’s legal right to your property.

Levy:The IRS has the option of issuing a levy which permits the seizure of your property in order to extract a tax debt. It could mean garnishing wages, taking money from your bank or other financial accounts, seizing and selling your vehicles, real estates and any of your personal properties.

Federal Payment Levy Program: The IRS in conjunction with the Bureau for Fiscal Service is empowered to collect your overdue tax debt through a continuous levy on some certain federal payment which is disbursed by the BFS.

IRS will send a defaulting taxpayer a final notice- Notice of Intent to Levy and Notice of Your Right to a hearing. If nothing is heard from you within a 30 days period from the date of the final notice, then the IRS will now transmit the levy electronically to the BFS and note that this will apply to all federal payment that can be levied with the exception of some certain social security benefits.

Part 2Tax Debt Relief Tips You Should Read If You Owe Money to IRS

●There are failure to file penalties and failure to pay penalties which you could face if you cannot pay your taxes. However, note that the failure to file penalty is more than the failure to pay penalty. That means that if incase you cannot pay all the taxes you owe, it is advisable to file your tax return in good time and pay in your capacity while exploring other payment options
●It is important to note that if you cannot pay your taxes when the date is due, then you will have to pay a failure to pay penalty of half to one percent of your unpaid taxes for each of the month or even part of the month after the due date when the taxes are not paid. However, note that this penalty could get up to about 25% of your unpaid taxes. But it is also important to note that if you request for extension of time and pay at least 90% of your tax liability by the initial due date, then you will not have to face any failure to pay penalty if the balance that is remaining will be paid by the extended due date.
●When both the failure to file and failure to pay apply in any month, then the 5% failure to file is reduced by the failure to pay penalty. But if you file your tax return more than 60 days after the extended due date or initial due date, the minimum penalty will be 100% of the unpaid tax. However, you will not be required to pay a failure to file or failure to pay penalty if you can convince the IRS that you failed to file or pay as a result of reasonable cause and not because of an intentional neglect.
●It is important to note that the IRS is guided by relevant laws that provide it the ability to access any penalty if you decide not to pay your tax obligations.