The Internal Revenue Service (IRS) has earned a formidable reputation for tax collection and pursuing taxpayers who fail to comply. Nevertheless, at Cotts Law, we help you become familiar with the widespread misunderstandings regarding the magnitude of their capabilities and the gravity of the threats they may present.
This article aims to elucidate prevalent IRS Tactics and the IRS’s actual capabilities, offering insightful perspectives from a tax relief expert. Contact our office at 361-866-3819 immediately for a complimentary, no-obligation consultation to discuss your options if you have been subjected to the methods outlined below. www.cottslaw.com
Tactic #1: Seizing Your Home Or Assets
Seizing assets and property is among the most dreaded IRS Tactics. Many taxpayers who owe back taxes are concerned that they will lose their property. The reality of the situation is, despite the IRS’s capability and willingness to place a lien on your property, seizing assets and property is uncommon and a complicated process; the IRS tax audit attorney frequently prefers alternative IRS collection methods, such as wage garnishments, bank levies, or the seizure of your accounts receivable if you are self-employed or operate a business. However, a second or vacation residence is a target for the IRS.
Tactic #2: Jail Time For Unpaid Taxes
Certain taxpayers are apprehensive that failure to pay their taxes will result in incarceration. In reality, tax debt solutions incarceration is extremely rare. It is true, however, that numerous Americans have been incarcerated and convicted for failing to file income tax returns as required by law.
Although the IRS can prosecute criminal charges for unfiled and unpaid taxes, this course of action is seldom pursued. Generally, the emphasis is placed on collecting the taxes owed rather than pursuing criminal prosecution. Nonetheless, it is imperative to confront tax debt in a timely manner to prevent the worsening of matters.
Tactic #3: Garnishing Your Entire Salary
Numerous individuals are concerned that wage garnishments by the IRS could deplete their entire income, leaving them destitute. In practice, wage garnishments are administered by IRS regulations that consider an individual’s income, deductions, and essential living expenses. It is true, however, that the IRS may withhold up to 80% of your net income to fulfil your IRS obligations.
Tactic #4: Freezing Your Bank Accounts
The prospect of the IRS suspending your bank account can evoke profound fear, given the imminent financial turmoil it signifies. The IRS may levy funds from your bank account to recover delinquent taxes; however, they generally provide you with notice before doing so.
Furthermore, you can negotiate a release of the levy through appeal, thereby regaining access to your funds. As permitted by the IRS, you have twenty-one days from the date of the levy notice to file a request to have the funds returned to your bank account.
Tactic #5: Never-Ending Interest And Penalties
Constantly accumulating interest and avoiding tax penalties on delinquent taxes is a common concern for taxpayers, as it can result in overwhelming and insurmountable debt. Although IRS penalties and interest can substantially amplify one’s tax liability, strategies are available to mitigate or eradicate them in the long run. Tax attorneys can assist in negotiating penalty abatements and examining payment plans to manage the debt effectively. Consider the daily compounding of IRS penalties and interest that remain unresolved, and your debt could double in a brief period due to the 8% interest rates charged by the IRS on unpaid taxes today.
Tactic #6: Losing Your Passport
The IRS may deny or revoke the passport application if the applicant has a substantial tax delinquency. However, the IRS only recently implemented this enforcement mechanism, which primarily targets taxpayers who are actively evading their tax obligations and owe more than $50,000 in debt. Resolving their tax issues will prevent passport revocation tax issues for most taxpayers.
Tactic #7: Endless Audits
Certain taxpayers believe that following an audit, they will be subjected to subsequent audits, thereby imposing a perpetual financial burden. Nevertheless, the IRS will seek to conduct concurrent audits of both the preceding and succeeding periods.
For instance, if the IRS audits your 2021 tax return concurrently, they will also examine your 2020 and 2022 returns. IRS audits are customarily undertaken to discuss particular concerns contained within a tax return. Although undergoing an audit may induce anxiety, it does not invariably result in ongoing audits. By resolving any identified issues, the audit may be concluded.
Tactic #8: Imminent Seizure Of Business Assets
Frequently, business proprietors are apprehensive that an IRS seizure of their company’s assets will destroy their means of subsistence. While the IRS does possess the power to business asset seizure, doing so is generally reserved as a last resort. They prefer negotiating settlements or establishing payment plans with firms to ensure their continued operations. Nonetheless, payroll tax liability (941) is a double burden. The IRS may pursue legal action not only against your business but also against you.
For taxpayers confronted with tax issues, it is critical to comprehend the truth behind prevalent IRS Tactics. Although the IRS has unrestricted authority to seize delinquent taxes, they favor resolution over stringent enforcement measures.
End Note
Engaging the services of an IRS tax audit attorney can help you navigate the IRS’s intricate regulatory maze, negotiate feasible resolutions, avert collection efforts, and safeguard your rights and alternatives.
Avoid being paralyzed by your apprehension of IRS Tactics; instead, adopt a proactive stance immediately to confront your tax difficulties and identify a resolution. To discuss your options, contact our office at 361-866-3819 today for a complimentary, no-obligation consultation. www.cottslaw.com
