7 Things To Know If You Owe The IRS

Do you owe money to the IRS? If so, it is normal to be stressed out and overwhelmed by your financial circumstances. As a starting point, it is important to emphasize that you are not alone. Official government data shows that Americans owe a collective $131 billion in taxes. There are solutions available—but you need to know how to navigate the system. Here, our tax attorney highlights seven things you should know if you owe money to the Internal Revenue Service.

IRS Collections: What You Need to Know

1. The IRS Does Not Go Away

First and foremost, it is important to emphasize that the IRS is not going to go away on its own. If you owe money to the agency, be proactive. Not only are interest and penalties adding up, but the IRS will (eventually) take enforcement action.

2. Always File Your Taxes

You are wondering if you should file your taxes if you cannot pay the full amount owed. The answer is always ‘yes’. Taxpayers have a legal responsibility to file an accurate, timely return. Failure to do so will subject you to additional penalties. Even if you cannot pay, you should file. If you have not filed in previous years, an attorney can help you resolve the matter.

3. You Must Be Notified Before Enforcement Action is Taken

Taxpayers are protected by federal regulations. One of your most important legal rights is your right to notification before enforcement action is taken. Indeed, taxpayers typically receive several notices about a delinquent balance (CP 501, CP 503, CP 504) before enforcement action is taken.

4. A Federal Tax Lien From The IRS is a Powerful Collection Tool

The IRS has powerful tax collection tools available. Most notably, the agency can pursue a federal tax lien. By doing so, they are essentially putting a claim on your property if you owe a tax debt. A federal tax lien can lead to wage garnishment, bank levies, and asset seizures. If you have any specific questions about IRS liens, an experienced Chicago tax lawyer can help.

5. You May Be Eligible for a Payment Arrangement From The IRS (Installment Agreement)

For taxpayers who owe money to the IRS, a payment plan is one of the most useful tools. Officially known as an installment agreement, a payment plan allows you to pay off your debt on a monthly basis. These agreements can last as long as 72 months. Depending on the amount owed, you may even be entitled to guaranteed approval.

6. You May Be Able to Settle Your Tax Debt to the IRS for Less (Offer in Compromise)

For those who owe more than $10,000 to the IRS, it may be possible to settle your total tax debt for less. Through an offer in compromise, you can negotiate an agreement with the agency to clear all outstanding tax debt for less than the full amount owed—often significantly less. Though, federal law does not require the IRS to accept your offer in compromise. As such, it is crucial that you build a strong case.

7. There is Always a Path Forward

No matter how bad your tax debt seems, there is always a path forward. The best thing you can do is take action now to address the problem. An experienced IRS tax attorney can help you navigate the system.

Call Our Chicago, IL IRS Attorney Today

At North Suburban Legal Services LLC, our Illinois IRS tax attorneys are skilled, effective advocates for our clients. We know how to protect taxpayer rights and help people resolve problems. If you have any questions about IRS collection and your rights, we can help. Contact us now for a confidential initial consultation. With an office in Chicago, our tax lawyers serve communities throughout the region, including Schaumburg, Evanston, Naperville, and Orland Park.




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