What if you can’t pay your taxes?
  • February 5, 2020
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One of the most dreaded questions on most taxpayers’ minds is “what happens if I fail to pay my taxes?” While there is no single, definitive answer to the question, to say the least, the road ahead is usually not pleasant, unless you take concrete steps to settle the issue. The good news is, there is always a way out, provided you have the guidance of an experienced IRS tax attorney such as Nick Nemeth. While you can always count on the team at the Law Offices of Nick Nemeth to provide you with comprehensive IRS tax help such as tax lien assistance, it pays to be informed. Here is a brief overview of what happens if you fail to pay your taxes. Read on.

Stage 1: Interest and Notices

The first stage after the due date has lapsed is the period during which the defaulter receives a collection letter from the IRS, and the tax body starts charging interest on the outstanding amount. While the annual interest rate charged is about 5 to 6 percent, the IRS may also charge a late-payment penalty ranging anywhere from 0.5 percent up to 25 percent per month.

Related Blog: Understanding Wage Garnishment Laws in Texas

Stage 2: Collection Calls and Lien

The second stage is when the IRS starts making calls to collect the debt. The calls can be quite intense and the gravity may increase as time progresses. If a defaulter is still unable to clear their dues, the IRS has the right to mark a lien on their property or financial assets. Though a lien is not the same as “seizure”, it is a claim on the property or assets by the IRS. It is worth mentioning that lien information goes into the defaulter’s public records.

Stage 3: Levy and Passport Restriction

If all the collection efforts fail, the IRS can impose a levy on the defaulter’s assets and may even put passport restrictions to prevent them from leaving the country. A levy is a legal claim by the IRS on a defaulter’s property, after which the tax body gets the right to liquidate the levied assets to cover the debt. The assets usually targeted by the IRS include bank accounts, Social Security payments, fixed property, and even the defaulter’s paycheck.

Related Blog: The Law, Costs, and Benefits of Payroll Taxes for Employers

How to Make Things Right?

First and foremost, do not procrastinate. While the IRS understands that people may have compelling reasons for being unable to pay taxes, you must come clean in front of the tax body. Rather than avoiding the IRS, which will only worsen the matter, taxpayers must consult an IRS tax attorney to discuss the possible ways through which they can address the issue at hand. The IRS has various provisions to help taxpayers who are unable to clear their debt. To exercise the options, you will need a sound knowledge of the IRS Tax Law.

The Last Word

“It always seems impossible until it’s done.” And it is no different when it comes to issues to do with IRS problems. While all may seem to have been lost when you are up against an IRS debt, there is almost always a way out given competent tax assistance. If you or someone you know has been struggling with an IRS tax debt that seems to be too big of a mountain to climb, speak with the IRS tax lawyers at the Law Offices of Nick Nemeth. Whether you need tax lien assistance or need help with any IRS debt problem, we are here to help you. To schedule a free, no-obligation consultation with a tax lien attorney, simply call us at (972) 426-2553.

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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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