The holidays are meant to be a time of peace and reflection, and even the Internal Revenue Service agrees with that. From the last week of December through the first week in January, the IRS takes a break from sending any new levies and garnishments so taxpayers can provide for their families and enjoy their company during this already-stressful season.Once the new year arrives, however, the IRS once again resumes collection measures — and they usually do so in force.
Because many IRS collection officers take time off during the holidays, the agency abides by an unwritten rule that they will not pursue or enforce collection activities during the last two weeks of the calendar year. This is because most collection activities ― liens, levies, garnishments, and audits, among others ― come with strict deadlines, which could be impossible for delinquent taxpayers to meet if they cannot reach anyone at the IRS office.
Therefore, it’s unlikely that taxpayers will be subject to any form of bank or property seizure during the holiday season. However, taxpayers should confront their tax problems directly once the holidays have passed, as the IRS will swiftly and aggressively resume their collection efforts between now and April 15.
Following the holidays, IRS employees return to work just like the rest of us. And when they do, they resume their collection process in full force. If you have an outstanding tax debt once the new year comes, though, you can expect to deal with any or all of the following:
Tax Liens: One way in which the IRS will pursue collection is through a federal tax lien, which is a legal claim to property ― including property acquired after the lien is placed. The IRS is placing liens now more than ever before — often times when clients enter into installment agreements owing more than $25,000.
While a lien is in effect, the IRS assumes a financial interest in your property, as they essentially own it. This means that if you decide to sell your property, the IRS has the first claim to any excess revenue derived from your home or other property, as opposed to any other creditors.
The lien process begins when the IRS assesses your liability and then sends a Notice and Demand for Payment, which is a bill that explains how much you owe. If you’re unable to pay, the IRS files a Notice of Federal Tax Lien alerting you that the government now has the legal right to your property.
If you can pay your debt in full, the lien will usually be released within 30 days. If not, the lien could result in the government claiming ownership of your personal and business property, as well as damage to your credit. In fact, federal tax liens can be so difficult to get rid of that in many cases, the lien will remain even if you file for bankruptcy. However, with the help of a skilled and experienced attorney, it is possible that the lien could be lifted, especially for small- to mid-sized businesses.
If you disagree with the results of the audit, you can request a conference or hearing with an IRS representative or file an appeal if the statute of limitations has not expired. This can be a time-consuming and stressful process, so be sure to consult an experienced tax attorney before entering into an audit or if you’re facing or have received unfavorable results from an audit.
Need Help with Liens, Levies, or Audits? Contact S.H. Block Today!
If you are facing an audit or are dealing with any of the collection issues listed above, please contact S.H. Block today by completing the form on this page or by calling us directly at (410) 872-8376.
Our attorneys and staff have more than 100 years of combined experience representing taxpayers, and we look forward to speaking with you so we can get you on the road toward resolving your tax problems for good!
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