How Far Can The IRS Go To Collect Your Taxes?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 15, 2021

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The answer to that question is “pretty far,” according to Justin Hein, managing attorney at Roni Deutch, A Professional Tax Corporation. Hein states that the Internal Revenue Service (IRS) is known as the nation’s most powerful collection agency for good reason.

IRS tax collection procedures

According to IRS tax collection procedures, the IRS can do a number of things in order to collect what you owe, such as:

  • Attaching wages. One IRS tax collection procedure allows the IRS to levy between 30-70 percent of a taxpayer’s wages to pay for a tax debt. The IRS can levy Social Security income; however they are limited in the amount they can levy.
  • Putting liens on property. Another IRS tax collection tactic is to place a lien on any property that you own, such as your home, business and even your car. A property lien stays in effect until the IRS tax debt is paid in full or the debt expires.
  • Attaching levies. IRS tax collection may also include attaching levies to your bank account. A bank levy freezes your account, prohibiting you from accessing any of the funds, and the IRS can withdraw all of the money in your account as payment on your IRS tax debt.
  • Seizing assets. Finally, IRS tax collection may include seizing assets. While this is incredibly rare, the IRS will use this method in large tax avoidance schemes. The IRS often uses property seizures to make a public statement that if somebody tries to abuse the tax system, they will seize their property.

IRS tax collection limits: Are their any?

Although it’s clear that IRS tax collection abilities are far-reaching, Hein assures us that disputing tax debts is an option and that the IRS does have limits when it comes to tax collection. They must give every taxpayer multiple chances to resolve their IRS tax debt before they enforce collection action. Also, before attaching a levy to a taxpayer’s bank account or wages, the IRS must send a final notice, giving the taxpayer 30 days to dispute the collection action being proposed or to make the full payment.

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