Significant tax debt that goes unpaid can pose a huge problem. If you’re not careful, the IRS could place a lien on your property, or they may levy your assets, meaning that they have the ability to seize them. That can be frightening to think about, but if you’re struggling with tax debt you shouldn’t simply ignore your debt obligation in hopes that it’ll just go away. Instead, you have to be prepared to defend yourself and take legal action to prevent asset seizure.
While the IRS can wield a significant amount of power when it wants to collect a tax debt, there are numerous actions you can take to try to hold them off, satisfy your tax obligation and retain your property. Here are some that you may want to consider if you’re facing significant tax burdens:
- Make an offer in compromise: Ultimately, the government just wants to recoup a significant portion of what you owe. This leaves you the opportunity to offer a lump sum payment that is sufficient for the IRS to discharge your remaining debt obligation. Before you can utilize this option, though, you’ll have to convince the government that you’re unable to pay your full debt amount.
- Set up a payment plan: Here, you agree to pay your tax obligation over time. If the IRS sees that you’re on an installment plan and making your payments on time, then they aren’t going to seize your assets.
- Seek a finding that you’re currently in non-collectible status: If your finances are depleted and you don’t have much income, then there isn’t much left for the government to seize from you. To prevent them from taking what you have left, then, you can seek a determination that you’re in non-collectible status. Keep in mind, though, that this status is temporary in nature, so it isn’t a true answer to your tax debt woes. That said, it might buy you enough time to formulate a more effective long-term plan.
- Request for collection due process: Within 30 days of receiving notice of the IRS’s intent to seize your assets, you can request due process. Once you do so, a hearing will be set at which you can seek alternatives to asset seizure or dispute your tax obligation. At this hearing you can also demonstrate that asset seizure would create an undue hardship, which may lead to some leniency.
- Pay your tax burden in full: This may not be an option for you, but if you have the money, you can simply pay off your tax obligation in full, at which time the IRS will cease its collection efforts.
You have several options when it comes to protecting yourself against the IRS’s aggressive debt collection practices. You have to simply figure out which option is best for you under the circumstances and act to protect yourself.
Do you have lingering questions about how to address your outstanding tax debt?
If so, then find answers to your tax problems now. Don’t wait until the IRS comes knocking for full payment under the threat of asset seizure. The sooner you act the more cooperation you might receive from the IRS. If you’d like to learn more about what you can do to get through this tough time in life, it may be wise to discuss the matter with your attorney so that you can develop the strategy that best protects your interests.