When your taxes are not paid the IRS will establish a lien against all of your assets (especially any real estate you may own). What this means is that the IRS can collect taxes from the sale of your assets against pretty much everything that you own.
This lien may not just affect you. It could be against your spouse or your small business. A lien against your company will seize your accounts receivables.
An IRS lien will also show up on your credit report and will often prevent you from opening a checking account or borrowing against any assets you may have, like your home for instance. The bank does not want the headache when the IRS comes to take your money.
With a lien on your record you will not be able to get a reasonable interest rate for a loan. If you bought a new car, the interest on loan would be around 18-22%!
A Levy is the way the IRS gets your attention IMMEDIATELY. When the IRS has reached this point, they have already tried to communicate with you and you have not responded.
A Levy is used to seize your wages and any other assets you may own. This includes, but is not limited to:
- Your checking account or savings account
- Your investment accounts (think retirement)
- Any stocks or bonds you may have
- Your car or home
- Even your Social Security check
Imagine how miserable you will be when you wake up one morning and all of your financial accounts are empty. If what you had in your account did not cover your bill they will keep your paycheck until this debt is paid 100%. This means your car payment, mortgage or employees paychecks will bounce tanking your credit score.
If they also go for your paycheck to cover your debt they will not leave you with enough left over to pay your bills.
If this does not accomplish their goal, the IRS will seize your assets and sell them at auctions. This will include any jewelry, homes, boats, cars, motorcycles, insurance policies, retirement accounts or anything else that has value.
We at Van Bulck Ratliff CPA Firm PC are often able to get these levies lifted and help you out of the terrible situation. Our goal is to help you square away your debt with the IRS, with a payment plan that you can afford and let you get back to life.