Sometimes the problem with “food for thought” is that it can almost choke you with its stark simplicity. Take our tax system, for example. The federal government prints our money, regulates the places where we keep it and has vast powers to take it away from us if we don’t give them their cut.

The aforementioned powers are the statutory means at their disposal to enforce collection, far beyond the capabilities of the most relentless collection agency. The IRS does not have to resort to harassing telephone calls, threats or intimidation. They need only to determine you have an unpaid tax debt and set in motion the process of notification and enforcement.

That process involves a series of letters telling you what you need to do. If you ignore those eagle-logoed notifications — or refuse to pay — after about 30 days, the IRS wrecking ball will begin to decimate you in the form of either a lien on your property or an outright levy.

Lien on me?

A federal tax lien removes the term private from your private property. It is, in the lexicon of the IRS, “the government’s legal claim against your property when you neglect or fail to pay a tax debt.” Said property would be all your property, “including real estate, personal property and financial assets.”

Once the IRS determines your liability and sends you a bill — Notice and Demand for Payment — and you don’t pay, the IRS files a Notice of Federal Tax Lien at your local courthouse to alert your creditors that you now have a not-so-silent partner when it comes to disposing of or borrowing against your property.

Getting down on the levy

A federal tax levy is an actual seizure of your property. While a lien guarantees security for a tax debt, the levy takes the property and the IRS sells it off.  Specifically, using a levy, the IRS can:

• seize and sell any property you hold — your car, boat, or home
• go after assets or property that is yours but is controlled by someone else. That would be your wages, retirement accounts, bank assets, income from rentals or accounts receivable and any cash loan value of life insurance policies you own.

As with a lien, if you owe the IRS you will get a Notice and Demand for Payment. If, after 30 days you haven’t settled up, you will receive a Final Notice of Intent to Levy and Notice of Your Right to A Hearing. You’ll get that final notice either in person, or an agent will leave it at your home or usual place of business.

What are your options?

There are ways to get an IRS lien removed from your property so that you sell it off to settle a tax debt. Also, the IRS is not interested in crippling you financially with a levy. In the latter case, you might be able to get the levy released and work out a payment plan.

If you’re facing an IRS collection action, don’t panic. Contact us. The IRS might be a steamroller of a collection agency, but before they can take what is yours, they must follow due process. We know that process and we’ll represent you and safeguard your rights.