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What are Back Taxes?

Back taxes are unpaid taxed that are assessed against a taxpayer by the government . These tax debts can be personal  or business related, such as in failure to pay payroll taxes. Back taxes are the result of not paying taxes when they are due, failing to report all income on a tax return, or failing to file a return.

What Is a Bank Levy?

An IRS bank levy is a garnishment of your bank account funds. It is similar to a wage garnishment, where they can seize a portion of the funds from your paycheck. In a bank levy, the funds in your bank account are seized in order to satisfy unpaid taxes, interest on unpaid taxes and penalty fees.

What Is a Collection Information Statement?

The Collection Information Statement is a form used by the IRS to determine what back taxes might be owed. This form usually gives information about the taxpayer’s income, expenses, and assets.

What Is a Collection Statute?

The Collection Statute of Limitations is 10 years from the assessment date of your tax. The IRS cannot collect on tax debts that are older than 10 years.

What is Currently Non-Collectible Status?

Currently Non-Collectible status is a situation in which the IRS recognizes that the taxpayer does not have the financial ability to pay the tax debt.

What Is an Offer In Compromise?

An offer in compromise (OIC) is an agreement, in which the IRS agrees to settle your debts for less than you owe. Based on your income potential, you will present an offer of the amount you propose to pay the IRS. If the IRS determines your offer is greater than the collection potential, based on your income, they may accept this settlement.

What Is a Payment Plan?

The most common financial assistance the IRS offers taxpayers is an installment plan, where you pay your tax debts at a reduced monthly cost over a specified period of time. The IRS installment plan will allow you to repay your debts as quickly as possible through a payment that you can afford.

What Is a Tax Abatement?

A tax abatement provides relief from tax penalties. The IRS may waive any delinquency fees or interest on owe debts and, in some cases, may refund any fees that have already been paid.

What is a Tax Lien?

A tax lien will take claim against your assets.  This allows them to claim the ability to seize and liquidate your assets in order to satisfy the debt. Tax liens leave your assets at risk for liquidation if the tax debt continues to be unpaid.

What Is Wage Garnishment?

Wage garnishment occurs when a lien holder, in this case the IRS, notifies your employer you are behind on your payments. An order is issued that requires the employer to pay the lien holder a specified amount out of your check before you receive your wages.  This garnishment order can take a significant amount of your income for several months until the debt is repaid.