The Internal Revenue Service (IRS) is the federal agency responsible for collecting taxes in the United States. They have the power to collect taxes automatically, meaning they can take money from your bank account, garnish your wages, or seize your property to pay off any unpaid tax debt.
Here’s what you need to know about how the IRS can collect taxes automatically:
1. Automatic Bank Account Levy:
One of the most common ways the IRS can collect taxes automatically is through a bank account levy. This happens when the IRS sends a notice to your bank, instructing them to freeze your account and turn over the funds to the IRS to pay off your tax debt. This can happen without warning, so it’s important to always be aware of any unpaid tax debt.
2. Wage Garnishment:
If you have unpaid tax debt and currently not collectible status, the IRS can also garnish your wages. This means that they can take a portion of your paycheck to put towards your tax debt. The IRS will notify your employer of the garnishment and your employer will be responsible for withholding a portion of your pay and sending it directly to the IRS.
3. Property Seizure:
In some cases, the IRS can also seize your property to pay off your tax debt. This includes real estate, vehicles, and other personal assets. The IRS will first send you a notice of their intent to seize your property and provide you with an opportunity to pay off the debt before they take any action.
4. Social Security Offset:
If you owe taxes and are receiving Social Security benefits, the IRS can also use a Social Security offset to collect taxes automatically. This means they can withhold a portion of your Social Security benefits until your tax debt is paid in full.
5. Passport Revocation:
In some cases, the IRS can even revoke your passport if you have a seriously delinquent tax debt and currently not collectible status. This means you will not be able to leave the country until your tax debt is paid off or you have made arrangements with the IRS to pay it off.
It’s important to note that the IRS is required to follow certain procedures and provide you with notice before they can collect taxes automatically. This includes sending notices of their intent to levy or garnish your wages, and providing you with an opportunity to dispute the debt or make payment arrangements.
If you are facing automatic tax collection, it’s important to seek the help of a tax professional or attorney. They can assist you in negotiating a payment plan with the IRS or advocating on your behalf to prevent automatic collection. In some cases, bankruptcy may also be an option to discharge certain tax debts.
In conclusion, the IRS has the power to collect taxes automatically through bank account levies, wage garnishment, property seizure, Social Security offsets, and passport revocation. It’s important to be aware of any unpaid tax debt and to seek professional assistance if you are facing automatic collection.