IRS Collections Attorneys

Filing and paying federal tax returns is critical, and when you get behind, the IRS will send a bill for the amount you owe. The collection process is intimidating and begins with the IRS issuing collection notices and letters to all types of taxpayers, including individual taxpayers, businesses, tax-exempt organizations, trusts, and estates.

The penalties involved for not filing taxes or filing the wrong amount can be high. You need an attorney to help you navigate

IRS Penalties and Interests

Taxpayers with unfiled returns are charged a penalty of 5 percent of the tax owed for each month up to 25 percent. Taxpayers who file taxes but do not pay the required amount will be charged with the failure-to-pay penalty.

In addition to penalties, the IRS is required by law to charge interest on the amount of tax owed for each day it is not paid in full. The penalties and interest can substantially increase the amount owed.

The IRS generally has a 10-year time period during which it can pursue the unpaid balance for ten years after the tax return is filed. Knowing about the collection process for overdue taxes is very important.

The Collection Process

When the IRS cannot obtain information to determine the amount of taxes owed, it will serve a summons to a taxpayer or a third party to meet with an IRS field officer and provide information. The IRS may request you to bring financial records to the meeting with the field agent to prepare a tax return.
Federal Tax Lien
The IRS has a legal claim against all of the taxpayer's current and future property, which includes the taxpayer's home, car, bank accounts, and wages.
Notice of Federal Tax Lien
Once the IRS places a lien on your property, it files the notice of federal tax lien to establish its priority of claim versus the claim of other creditors.
The IRS will give the taxpayer 30 days' notice that they will seize the property or the rights to the taxpayer's property. A levy can occur on the proceeds of the sale of property. Also, the IRS has several different levy sources. They can impose levies on bank accounts, on social security, or on wages.

IRS Collection Alternatives

When facing tax debt, it’s important to understand that the IRS offers several alternatives to help taxpayers manage and resolve their obligations. Instead of enduring enforced collection actions, you can explore various options to settle your tax debts. These alternatives include:

  • Pay in Full

The first payment option is to pay off your tax debt in full. While this may not be the most attractive option for those who are struggling financially, it will stop the IRS and prevent further collection activity.

  • Installment Agreement

One collection alternative when you cannot afford to pay off your debt in one lump sum may be to set up a payment plan with the IRS. This will allow you to pay off your debt over time in smaller, more manageable chunks.

  • Offer in Compromise

An offer in compromise is a settlement option that allows you to pay off your delinquent accounts for less than the full amount owed. This option is only available to those who can demonstrate that paying off the full amount would cause undue hardship.

  • Currently Not Collectible

If you are facing significant financial hardship and simply cannot afford to pay anything towards your tax liability, you may be able to request that your account be designated as “Currently Not Collectible.” This means that the IRS will temporarily suspend collection activity until your financial situation improves.

  • Innocent Spouse Relief

If you were married and filed a joint tax return, you may still be able to claim innocent spouse relief if your spouse was solely responsible for the tax debt. This would allow you to avoid unpaid tax liability and would instead make your spouse solely responsible.

No matter what your situation is, it is important to understand the IRS’ collection procedures and to explore all of your options when dealing with IRS Collections. With the right strategy and some patience, you can work towards resolving your tax debt and getting back on track financially.

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Contact a Maryland IRS Collections Attorney

If you are dealing with IRS collection actions and require the services of a Maryland tax collections attorney, Jessica Ledingham, a skilled tax attorney in Baltimore, can offer the expert guidance and representation essential to effectively navigate all IRS collection efforts.

Take the crucial first step towards addressing your IRS tax collection action issues. Contact Ledingham Law tax collections attorneys today at (240) 673-6869.