How the IRS Can Ruin Your Day:
The IRS Tax Lien and Bank Levy
By: abagaile odalis
Owing the IRS can be a stressful experience even before the IRS takes any significant action against you. Once you receive a letter from the IRS stating that you owe back taxes, take action immediately! Dont put the letter down and plan to do something about it later. If you put this grave situation off you will get a second letter. If youve received a second letter and you still havent done anything, do something now! Stop reading this article, contact a professional for IRS tax help, and get something done!
Why is it so important to take care of your debt right away? The IRS is the most powerful and aggressive collection agency in the world. And when you get that third letter your time is up. First of all, that third letter is sent certified mail, and if that does not identify its importance, the contents of the letter will put the fear of the IRS into you. That third letter demands that you pay the debt or they will put an IRS tax lien on your credit and/or an IRS bank levy on your accounts!
How bad can that be? When the IRS puts that bank levy on your bank account, they are seizing your money to pay the debt you owe. On top of that, you cant access your account while it is levied. Are you ready for the best part of an IRS bank levy? Take a deep breath before I go any further. The IRS doesnt have to notify you when they do levy your bank account. Youll try to use your bank card or write a check, and thats when you find out your bank account is frozen. Not only can that be embarrassing, it can prevent you from paying basic bills like electricity and food!
Lucky for you, once the IRS gets as much money as they can from your bank accounts theyll lift the levy. Of course by then, your accounts are wiped out.
An IRS tax lien is a little more insidious. It doesnt directly affect your money, but it royally messes up your credit! An IRS tax lien is a black mark on your credit report and there is no way to remove it until you pay or settle your tax debt. While a tax lien is in effect you can forget about getting any kind of loan for anything. And if the IRS places a tax lien on your home, you cant sell it, or refinance it. You cant even get the zoning permits to make improvements on your own home.
So what can you do about an IRS tax lien? Remember when you got that first and second letter. You have to act then by finding expert IRS tax help or by trying to deal with the IRS yourself. Once the tax lien is in effect, it cant come off until you pay the debt off completely.