Serious consequences of IRS debt
  • May 5, 2021
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It may feel tempting to ignore tax debts but the IRS can eventually force you to pay using various tools such as liens, levies, and wage garnishments. Ignoring your tax debts can lead to serious consequences. The good news is that with professional IRS debt help, you can apply for IRS debt relief options such as a simple extension of the time you have to pay or entering into a monthly payment plan. In this blog post, we will discuss some common yet serious consequences of ignoring IRS debt.

Suspended Tax Refunds

This is the first action taken by the IRS against taxpayers with outstanding taxes. If you have unpaid taxes but have a tax refund that is due to you, the IRS can suspend the refund until your debts are settled. If you have been granted a payment plan such as installment agreement, the IRS can still suspend your tax refunds. The amount withheld will be subtracted from your tax debt, reducing interest charges.

Related Blog: A Look at the New 2021 Income Tax Brackets

Hefty Penalties and Interests

The IRS charges a failure to pay penalty on the amount of tax owed at the rate of 0.5% per month. If the IRS has sent you several notices for tax collection and you haven’t responded appropriately, the interest amount can be doubled to 1%. You can easily bring the penalty rate down to 0.25% by setting up a payment agreement with the IRS.

Federal Tax Lien

If you fail to pay your tax debts even after receiving a notice, the IRS can file a Notice of Federal Lien. This way, creditors get all the information about your tax debts and it becomes really difficult to sell property with a tax lien. Additionally, federal liens are public notices that can give you a bad image which is a bad thing for your financial health and business.

Related Blog: All You Need to Know about IRS Cancelled Debt

Seizure of Your Money and Assets

The IRS can also seize your money and assets by filing a levy if you have unpaid taxes. Some common levies include wage garnishment, Account Receivable Levy, and Bank Levy. Levies can create a big hassle and be devastating for both individual taxpayers and businesses. It can disrupt the cash flow and affect your ability to pay your bills, effectively restricting you from carrying out your daily business operations.

Wrap Up

Unpaid taxes can bring serious consequences if they are not resolved on time. If you or a loved one is looking for IRS tax help in or around Dallas, Texas, look no further. The Law Offices of Nick Nemeth gives you access to a team of seasoned tax attorneys in Dallas, Texas. We have a proven track record of helping clients solve IRS tax issues including IRS debt relief. To talk to one of our attorneys at (972) 426-2553 or fill out our contact form, and we will take it from there.

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What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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