Any time you don’t pay the tax balance shown on your federal income tax return in full by the due date, you create a tax debt.

The IRS can charge penalties and interest on that debt, and those will add up until you pay off the tax debt.

The IRS will send you increasingly urgent notices requesting payment. If the IRS doesn’t receive a response, the IRS can begin enforced collection action, such as issuing a levy on your wages or bank accounts or filing a federal tax lien.

A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest in all your property, including real estate, personal property, and financial assets. A federal tax lien exists after:

The IRS:

- Puts your balance due on the books (assesses your liability)

- Sends you a bill that explains how much you owe (Notice and Demand Payment)

You:

- Neglect or refuse to fully pay the debt in time.

How to Get Rid of a Lien? Paying your tax debt - in full - is the best way to get rid of a federal tax lien. The IRS releases your lien within 30 days after you have paid your tax debt.

When conditions are in the best interest of both the government and the taxpayer, other options for reducing the impact of a lien exist.

A wage levy is when the IRS seizes part of your paycheck to satisfy back taxes. Part of your wages will be sent to the IRS each pay period until :

- You make other arrangements to pay your overdue taxes.

- The amount of overdue taxes you owe is paid.

- The levy is released.

Part of your wages may be exempt from the levy and the exempt amount will be paid to you. The exempt amount is based on the standard deduction and an “amount determined” calculated in part based on the number of dependents you are allowed for the year the levy is served.

An Installment Agreement is an IRS program that allows individuals to pay their tax debt in monthly payments. The total amount paid can be the full amount of what is owed, or it can be a partial amount.

There are several different kinds of Installment Agreements: Guaranteed, streamlined, Partial, and Full Pay.

The authority to enter into an installment agreement is statutorily defined in the Internal Revenue Code Section 6159.

When you qualify for a penalty abatement, you will receive a waiver for a penalty that you incurred from the IRS due to unpaid taxes. Failure to make a payment, file your taxes on time, or a tax filing error can all lead to penalties. These are all common issues among taxpayers, and you may find yourself facing a penalty from the IRS as a result. Fortunately, if you can get a penalty abatement, your penalty will be waived.

To qualify, you must be in compliance with your tax returns and your payments to the IRS. To meet the filing compliance requirement, you must have filed or filed an extension for all required returns and have no outstanding request from the IRS. This means if you need to file a certain year’s tax return, you must file it before you can request a penalty abatement.

To make sure you are in compliance with your payments, you must have paid or arranged to pay any tax due. You can be approved for an installment agreement and also submit a request for a penalty abatement if your payments are current. And lastly, to qualify you must have a clean penalty history. This means you cannot be eligible for a penalty abatement if you had any penalties for the previous three tax years.

DID YOU RECEIVE A W-2 OR 1099 FROM A UNKNOWN EMPLOYER? CONTACT THAT EMPLOYER RIGHT AWAY. YOU COULD HAVE BEEN A VICTIM OF IDENTITY THEFT. I CAN HELP YOU PREPARE AN IDENTITY THEFT AFFIDAVIT AND SUBMIT THE INFORMATION TO THE IRS.