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Four ways the IRS can take your money without your consent

On Behalf of | Dec 13, 2022 | Tax Collection

If the Internal Revenue Service (IRS) believes you owe them money, they will send a bill. This bill will contain all sorts of information, from how much is owed to the potential penalties and additional charges that can apply if you fail to pay by the due date.

What legal tools can the IRS use to collect payment?

The IRS can use various tools to collect payment, even if you do not give them the money. Some of the more common include:

  • Levy. This is a legal seizure of property. The IRS will send you a notice and generally provide 30 days before they take the property.
  • Garnishment. The IRS can use a wage levy to garnish your wages. This means they take money directly from your paycheck. Your employer sends a portion of your paycheck directly to the IRS.
  • Lien. This is a legal tool that serves to let other creditors know if the asset that is subject to the lien is collected by creditors, the IRS is likely the first in line for payment.

In serious cases, the IRS can use a jeopardy assessment.

What is a jeopardy assessment?

A jeopardy assessment is available when the IRS can establish that they are in danger of loosing the ability to collect on an outstanding tax debt. Tax law generally allows taxpayers opportunities to resolve a tax controversy with the IRS before it moves forward with the collection efforts noted above. However, in certain cases, the IRS can bypass these requirements and confiscate assets to protect government interests.

Circumstances that qualify for this type of action often include situations where the government believes the taxpayer plans to flee the country, hide property, or transfer property in an attempt to remove it from the government’s reach.

How will I know if I am the subject of a jeopardy assessment?

The IRS will generally send a notice. You then have 10 days to either pay the bill or fight back. You can fight back by filing a bond to stay the agency’s collection efforts. However, if the IRS has reason to believe the notice would result in the inability to collect payment, it could move forward without sending notice. Examples of situations that could lead to this action can include the belief that the taxpayer is involved in illegal activity or has a history of concealing assets.

It is important to note that the government does not need to establish they are in danger of losing the ability to collect before it moves forward with collection. They only need to establish that the taxpayer’s actions appear to put collection efforts in danger.

How can I protect my interests if the IRS is trying to collect on a tax debt?

There are various legal remedies for these situations. The best path depends on the details of the situation but can include filing forms with the agency to contest their argument or going to court. The attorneys at Goldburd McCone are familiar with these matters. They can review the details of your case and provide guidance tailored to your situation.