Tax Debt Help Blog

Social Media Tools the IRS Uses Help You with Your Taxes

Miranda Marquit — Mon, 14 May 2012 00:00:00 PDT

When we think of the IRS, few of us think about social media. However, the IRS does recognize that many taxpayers use social media regularly. As a result, you can get answers to tax questions, and get helpful tips year-round by taking advantage of the social media tools offered by the IRS.

Twitter

If you are looking for daily tax tips, as well as announcements, you can take to Twitter to follow different accounts. Here are some of your options for Twitter help from the IRS:

@IRSnews: This the Twitter feed that offers regular tax tips, as well as important announcements. Keep up with the latest from the IRS all year.
@IRStaxpros: Get help and guidance if you are a tax professional. Even if you aren't a tax professional, the insights can be useful as you prepare your taxes, or figure out which deductions to take.
@IRSenEspanol: Spanish-speakers can get the tax information they need with the help of this Twitter feed.

YouTube

Looking for helpful information in video form? The IRS YouTube Channel offers just what you need. You can get the latest tax tips, as well as how-to information on filing taxes (including using IRS Free File). You can also find helpful videos on issues that affect you, but might not be directly related to taxes, such as identity theft. There is also a playlist for small business tax videos.

In addition to YouTube videos in English, the IRS also offers videos in American Sign Language and in Spanish.

Podcasts

If you are looking for audio only, podcasts can be of help. These short recordings can help you with specific tax topics. Whether you are trying to make the tax deadline, or whether you are doing your best to plan ahead for the coming year, these podcasts can be helpful. IRS podcasts are available on iTunes (take them with you), or in the Multimedia Center on the IRS web site. You can also find transcripts of the podcasts in the Multimedia Center.

IRS2Go

You can download this application to help you get updates to your tax refund status. The IRS2Go app is available on iPhone (and other Apple mobile devices) and Android devices. You can check your tax refund, and you can also receive tax updates and other news. It's a simple way to access important IRS information no matter where you are.

Widgets

As you might imagine, the widgets are more for those visiting a web site you might have. These widgets are designed to help visitors to web sites find information on the IRS quickly and easily. These widgets are often found on social networks and blogs related to taxes. They take visitors directly to common information they might be looking for. Even though you might only use the widgets as a way to help others visiting a site you have, they are still an interesting tool that indicates the interest the IRS has in outreach to taxpayers.

It's important to understand, though, that the IRS can't answer questions through these social media outlets, and that you need to be vigilant in keeping your personal information safe. These social media tools can be helpful to you, and provide you with information, but if you need personalized help from an IRS representative, you need to use the contact channels on the IRS web site.

5 Tips for Taking a Tax Deduction for a Charitable Donation

Miranda Marquit — Mon, 7 May 2012 00:00:00 PDT

Most of us want to give in order to help others. Charitable donations, whether they are in the form of cash, investments, or goods, can help others, and allow us to feel as though we are contributing in a meaningful and positive way.

Another benefit is that you can often take a tax deduction if you donate to charity. While you likely don’t donate just for the tax deduction, it is a nice bonus for your generosity. As you give, though, keep in mind these 5 tips:

1. Make Sure the Organization is Eligible

If you want to give to a worthy cause, it doesn’t matter whether or not the organization has the proper charitable credentials. However, if you want to give to a worthy cause and receive the tax deduction, you need to double check what qualifies. IRS Publication 526 offers insight into how you can give while receiving a tax deduction. You call the IRS at 1-877-829-5500, or you can use this tool.

2. Make Sure You Have the Proper Documentation

When you give, you need to have a record of the transaction. It doesn’t matter what you are giving, or how much; the IRS requires that you have documentation showing the organization’s name, the date, and the amount given. The good news is that your phone bill showing a text message donation is sufficient, as is a bank record or payroll deduction. Otherwise, ask for a receipt.

3. Donated Items Must be in Good Condition

You can deduct the value of items that you donate to a charitable organization, but you need to make sure the items are in good, usable condition. Charities don’t want to act as your trash disposal – and the IRS doesn’t consider goods in poor condition eligible for a tax deduction. Add up the value of the goods, and don’t forget to ask the organization for a receipt. Remember, too, that it is current fair market value that is deducted, and not what you paid for the items.

4. You Can Get Two Tax Benefits for Donating Stock

If you decide to donate stock, you can receive two tax benefits. First of all, you don’t pay capital gains taxes on your increase when you donate stock. Second, you can deduct the entire current value of the gift from your taxes. So, if your stock was worth $100 when you bought it, and it has appreciated to $400, you can deduct the entire $400. If you are donating a losing stock, though, you are better off selling the stock and deducting the investment loss, and then donating the cash for a charitable donation deduction.

5. Large Donations May Require Extra Forms

If you donate more than $500 in non-cash contributions over the course of the year, you will have to fill out Form 8283 to detail the transactions. Additionally, if you donate an item, or a group of related/similar items that are worth more than $5,000, you will need to make sure to fill out Section B of that Form 8283, which requires that you have the items appraised. Be aware that there are different requirements when you donate your car, as well.

Taxpayer Advocate Service: Can the IRS Help You?

Miranda Marquit — Mon, 30 Apr 2012 00:00:00 PDT

Many of us don't think of the IRS as a helpful entity when it comes to resolving problems. However, the IRS does have an independent organization aimed at helping taxpayers figure out what went wrong - and how they can fix it.

The Taxpayer Advocate Service is designed to help those who are having trouble with their taxes, and who can't solve their problems through normal channels. Many of those taxpayers most likely to benefit from the Taxpayer Advocate Service are those experiencing economic hardship, as well as those who feel as though an IRA procedure is working in a way that causes harm.

In addition to providing individual help to taxpayers, the Taxpayer Advocate Service also looks into system-wide problems at the IRS. Advocates look at policy and procedure, and recommend changes that can improve the overall experience for multiple taxpayers. The systemic part of the Taxpayer Advocate Service also addresses issues of taxpayer rights, and even works to improve equitable treatment of taxpayers and reduce taxpayer burdens.

Who Can Use the Taxpayer Advocate Service?

Employees of the Taxpayer Advocate Service are used to help taxpayers who meet specific eligibility requirements. The services provided are free of charge, and there is a screening process to determine whether or not you should use the service. In general, here the three main that mark eligibility for using the Taxpayer Advocate Service:

Experience of economic harm. This can also include the cost of representation from a professional. If you are subject to economic difficulty, or if you are experiencing economic harm as a result of your tax problem, you might be eligible for help.
The date promised by the IRS for a resolution of the tax issue has passed, and a response has not been received.
A delay of more than 30 days has been experienced as the taxpayer tries to resolve the issue.

In these cases, it's possible to use the free and confidential Taxpayer Advocate Service. Advocates understand the IRS, and are employed by the agency. This means that they are likely to be able to help you navigate the ins and outs of procedure and process. Advocates are trained to listen to taxpayers, and respond in a way that is specific to the taxpayer problems. You can work with the same advocate until your tax issue is resolved.

Contacting Taxpayer Advocate Service

Each state, plus the District of Columbia and Puerto Rico, has at least one Taxpayer Advocate Service representative. In most localities, you can check your phone book (in the government listing section) for information. You can also find the information in Publication 1546, which is designed to provide information about how the Taxpayer Advocate Service can help you.

Additionally, it's also possible to fill out and submit IRS Form 911, which can help you get into the system so that you are contacted by a representative of the Taxpayer Advocate Service. You can even ask an IRS employee to fill out Form 911 on your behalf. Finally, you can call 1-877-777-4778 to connect with an advocate.

3 Tips for Organizing Your Taxes Throughout the Year

Miranda — Wed, 25 Apr 2012 00:00:00 PDT

Many of us think of tax time only once year for a few weeks or months as we frantically try to gather all of the documentation needed to file taxes. If you stress out during tax season, you can make things easier going forward by organizing your tax information year round.

Here are three tips for keeping your tax documents organized year-round:

1. Consider Your Likely Deductions and Credits

Your first step is to plan ahead. Consider the likely deductions and credits you will take throughout the year. If you know that you will be taking your kids to a daycare, prepare ahead of time, since you might be eligible for a tax credit. Keep track of what you spend, as well as make sure to get the tax ID number for the childcare provider.

You can also keep track of deductions. If you know that you will make charitable donations, prepare to request a receipt. If you will be driving for business purposes, keep a mileage log in your car. Look ahead and determine what events and expenses during the year might result in deductions or credits. Be aware of your situation, and what's coming up. Prepare ahead of time so that you can have what you need to keep the right records.

2. Set up a Filing System

Next, set up a filing system. It's best to keep things organized as you go along, and a filing system can help. Have a file labeled "tax receipts," or something similar. As soon as you receive appropriate documentation, immediately file it away. You can make it even simpler by keeping the file somewhere that is easily accessible, such as in a document holder on your desk, or in a hanging file in a convenient drawer. That way, it's easy to simply put the receipt where it belongs - almost without thinking about it. Later, when you are gathering your records at tax time, everything you need is right in the folder.

You can also put other tax documents in the folder as they arrive in the mail, from your W-2 to your mortgage interest statement.

3. Digitize Your Records

For those interested in quick access, and a paperless office, digital records can help. Create a file on your computer, or in the cloud, for tax documents. Scan in the documents and save them. You can also use applications, like Shoeboxed, that help you store digital versions of your receipts. These applications allow you to use your smart phone to take an image of a receipt and then it is digitally filed the way you want it.

To be safe, though, it's important that you protect your sensitive information. You can encrypt folders and password protect them. Also, don't forget to ensure that they are backed up regularly; you don't want to lose your documents in a computer or server crash.

With a little planning ahead, it's possible to keep your tax information organized all year. Take a few minutes each month to stay organized, and you'll save hours during tax season.

How to Figure Quarterly Estimated Tax Payments

Miranda Marquit — Tue, 17 Apr 2012 00:00:00 PDT

If you have income from sources other than a "traditional" job, chances are that you need to make quarterly estimated tax payments. Estimated quarterly Federal tax payments for 2012 is April 17th, June 15th, September 17th, and Jan 15 of 2013). If you are a regular W-2 employee, then your taxes are automatically taken out of your paycheck. However, if you make money in another way - even if it's "only" on the side - you might need to pay quarterly estimated taxes.

You might need to make estimated tax payments if any of the following apply (realize for farmers and fisherman the rules are generally different):

You have your own business: When you have your own business, normally you make estimated payments. Even if it is a side business or a full-time gig, you will most likely need to pay estimated payments.
You receive investment income: In some cases, your income investments might mean that you need to pay quarterly estimated taxes. If you receive significant dividend payments, or if you sell an investment and see a sizable capital gain, paying estimated taxes is usually a good idea.
You are a landlord: Your rental income usually qualifies you to pay quarterly taxes.

There are other situations that might warrant paying quarterly taxes. If you do have a regular job, you can reduce the need to pay quarterly taxes by increasing the withholding from your paycheck. Many find that this can be a way to keep things simple - as long as the amounts owed are relatively small. The reason why you make estimated payments is so you can avoid underpayment penalties.

Paying Quarterly Estimated Taxes and Avoiding Penalties

Making your quarterly estimated payments is important, since the IRS will assess tax penalties you if you owe a lot in taxes. Many people think that by keeping the money in an interest bearing account all year they can gain an advantage and then make a big payment at tax time. The IRS frowns upon this practice, and when your tax bill is too big you are fined.

Paying quarterly estimated taxes can help you avoid this fine. If you want to avoid the penalty, the IRS requires that you pay in at least 90% of what you owe for the current tax year, or that you pay 100% of the amount shown on your previous year's return (110% if your AGI is $150k or more). As long as you at least the smaller of those requirements, you won't be penalized - even if you have a large tax bill.

If you use the 90% method, you will need to project your income and deductions for the coming year. You can do this by figuring your year-to-date income and expenses and multiplying it out. You can do this by a monthly average (multiplying by 12) or a quarterly average (multiplying by four). Once you have an income total, you will need to look at a tax table that provides information about the current year's brackets. This will give you your tax liability. You can then choose to take 90% of that number and divided it by four, or by dividing your entire liability by four and using that for quarterly payment.

An easier method, of course, is to divide your entire tax liability from the previous year by four, and then pay that amount each quarter. To break it down further and make it easier, you can divide by 12 and pay into a savings account each month. Then, each time quarterly tax payments are due (April 15, June 15, September 15, January 15), you can make a payment from the appropriate account.

Plan ahead for quarterly taxes, and remember to include them in your budget. Otherwise, you could be in for a nasty surprise.

Tax Deductions That Can Be Taken Without Itemizing Your Return

Karen Cooper — Mon, 16 Apr 2012 00:00:00 PDT

An itemized tax deduction is a qualified expense by which a US taxpayer can claim on their Federal tax returns in order to lower their taxable income. Many tax deductions are subject to the 2% limit, which means you can only claim the amount of total expenses that is 2% above your adjusted gross income (AGI). However, there are tax deductions that can be taken without itemizing your return, called above-the-line tax deductions, and can help you save money even if you take the standard deduction.

Some of these deductions are considered temporary, but the majority of above-the-line tax deductions are the same from one year to the next. Many of the below above line tax deductions have income restrictions, or other restrictions you need to know. When in doubt, reach out to a tax professional or read IRS publication 17.

Deductions Available to Everyone

The following deductions are available to everyone who is eligible, regardless of your career or filing status:

- Contributions to an IRA

Money contributed to a Traditional IRA can be deducted up to certain limits.

- Health Savings Accounts Tax Deductions

If you have a Health Savings Account (HSA), you can write off your contributions to the account.

- Qualified Expenses for Moving

For individuals who moved during the year because you were starting a new job or transferred to a new job location - the costs associated with moving may be deducted.

- Alimony or Spousal Maintenance Deductions

If you pay your ex-spouse money in the form of alimony or spousal maintenance, you can deduct the amount that you paid from your income. Don't confuse alimony with child support – child support is not a tax deduction.

Teachers, Qualified Educators & Students

If your school's supply budget has been decreased to the point that you find yourself purchasing supplies with your own money to operate your classroom, some of that money can be deducted:

- Educator Tax Deductions

If you are a teacher or school employee, you are allowed up to $250 in deductions for supplies you purchased for your classroom with your own money. If you and your spouse are both educators, and file jointly, then you can deduct up to $500 in qualified expenses.

- Student Loan Interest Deductions

Paying back your school loans is a requirement – but you can write off a maximum of $2,500 in school loan interest every year until the loan is paid off (income restriction $75,000 individual and $150k if filing jointly).

- Tuition and Fees Deduction

You may be eligible to write off up to $4,000 per year in tuition and college fees.

Self-Employed and Business Owners

If you are self-employed or own a business but are not itemizing, there are still some tax deductions you may be able to take advantage of, including:

- Self-Employment Tax

If you worked as a freelancer, home party sales representative, or operated a business full time, you probably paid self-employment tax. Half of self-employment tax you paid is tax deductible.

- SEP IRA Contributions

You can deduct contributions to a SEP IRA or a Simplified Employee Pension Individual Retirement Arrangement.

- Health Insurance for the self-employed

If you paid health insurance premiums as a self-employed individual, you can deduct 100% of the premiums paid.

Reduce Your Adjusted Gross Income (AGI)

Taking any of these tax deductions can reduce your adjusted gross income – which should reduce the amount of taxes owed. The less taxable income you show, the less you owe the IRS. Many of these “above-the-line” deductions require that you fill out additional forms to show your deduction calculation, but it's worth the effort to reduce your taxable income.

Top 25 Funny & Famous Tax Quotes

Matt Robinson — Sun, 15 Apr 2012 00:00:00 PDT

Many people claim having a sense of humor will get you through the most difficult of times – what’s more challenging than parting with your hard earned money to pay your income taxes? Everyone from politicians to comedians and authors has had something to say about the United States tax system – here are the top 25 funny tax quotes we’ve found:

“I just filled out my income tax forms. Who says you can't get killed by a blank?” - Milton Berle
“Be wary of strong drink. It can make you shoot at tax collectors... and miss.” - Robert Heinlein
“It's income tax time again, Americans: time to gather up those receipts, get out those tax forms, sharpen up that pencil, and stab yourself in the aorta.” - Dave Barry
“The politicians say "we" can't afford a tax cut. Maybe we can't afford the politicians.” - Steve Forbes
“Two things you need to know about taxes. They've extended the deadline to April 18 (in reference to 2010 taxes), and when you write your check, just make it out to China.” - David Letterman
“The U.S. Senate is considering a bill that would tax Botox. When Botox users heard this, they were horrified. Well, I think they were horrified. It's difficult to tell.” - Craig Ferguson
“Isn't it appropriate that the month of the tax begins with April Fool's Day and ends with cries of May Day!” - Robert Knauerhase
“Tax day is the day that ordinary Americans send their money to Washington, D.C., and wealthy Americans send their money to the Cayman Islands.” - Jimmy Kimmel
“On my income tax 1040 it says "Check this box if you are blind." I wanted to put a check mark about three inches away.” - Tom Lehrer
“Thinking is one thing no one has ever been able to tax.” - Charles Kettering
“It is a good thing that we do not get as much government as we pay for.” - Will Rogers
“The taxpayer: that's someone who works for the federal government, but doesn't have to take a civil service examination.” - Ronald Reagan
"Worried about an IRS audit? Avoid what's called a red flag. That's something the IRS always looks for. For example, say you have some money left in your bank account after paying taxes. That's a red flag.” - Jay Leno
“I love America, but I can't spend the whole year here. I can't afford the taxes.” - Mick Jagger
“When it comes to taxes, there are two types of people. There are those that get it done early, also known as psychopaths, and then the rest of us.” - Jimmy Kimmel
“This is the season of the year when we discover that we owe most of our success to Uncle Sam.” - The Wall Street Journal
“This is too difficult for a mathematician. It takes a philosopher.” - Albert Einstein, on filing tax returns.
“Collecting more taxes than is absolutely necessary is legalized robbery.” - Calvin Coolidge
“The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least amount of hissing.” - Jean-Baptiste Colbert
“When there's a single thief, it's robbery. When there are a thousand thieves, it's taxation.” - Vanya Cohen
“Taxation with representation ain't so hot either.” - Gerald Barzan
“Capital punishment: The income tax.” - Jeff Hayes
“If you get up early, work late, and pay your taxes, you will get ahead -- if you strike oil.” - J. Paul Getty
“Because of a holiday, the deadline for taxes is April 18, so you have three extra days to dig through restaurant dumpsters for receipts.” - Jimmy Kimmel
“Another one of President Barack Obama's nominees is having tax issues, which proves one thing: The Democrats like raising the taxes, but they hate paying them.” - Craig Ferguson

It's About How the US Effective Corporate Tax Rate Ranks Globally

Matt Robinson — Thu, 12 Apr 2012 00:00:00 PDT

The debate over US Corporate tax rates recently has been a hot topic of debate among politicians, economists, the media, and more. Some have stated that the US has the highest corporate statutory tax rate in the world, while others state that the effective tax rate is lower. They are both right, but what about the US effective corporate tax rate vs. other developed countries?

Highest US Corporate Statutory Rate in the World

The Heritage Foundation, many politicians, and economists have argued that we now have the highest corporate income tax rate in the world. After Japan lowered its rate to 36.8% recently, the US's rate of 39.2% percent becomes the world leader (35% Federal rate plus the average rate states add on). Are they correct that nominal US statutory corporate tax rate is the highest in the world? Yes. However, the effective tax rate would be a better metric to look at.

Effective Tax Rate Has Fallen for US Corporations

Warren Buffet recently stated that high US corporate income tax rates are a "Myth." He backs this statement, by claiming that the real effective corporate tax rate in 2011 was 12.1% according to the Congressional Budget Office (CBO). He is correct that the effective tax rate is much lower than the statutory rate, for now. Yes, the effective corporate tax rate is low in relation to the past. From 1987-2008, the effective corporate tax rate rate was 25.6% according to the same CBO study Buffet is referring to. Corporations suffered massive losses during the great recession and the drop in profits is correlated with when the downturn started. It can also be attributed to accelerated depreciation or "bonus depreciation" and other legislation that was passed. Either way, the CBO projects that US corporations will get back to the 25.6% effective corporate tax rate average in the next few years.

Our Effective Corporate Tax Rate Vs. Other Developed Countries?

An important part of figuring out whether the US corporate effective corporate tax rate is low is by seeing how we fair against international competition. There is data on the effective tax rate for corporations in Japan and other countries from 2010. A report from the American Enterprise Institute last year, shows that our effective corporate tax rate is one of the highest in the OECD or Organization of Economic Cooperation and Development (OECD) which comprises 34 market based countries. For 2010, the average effective tax rate for the OECD (excluding the US) was 20.5% while the United States was 29%. Can anyone explain this?

Please let us know your thoughts.

When to Consider Hiring an Accountant to Prepare Your Taxes

Miranda Marquit — Mon, 9 Apr 2012 00:00:00 PDT

Many of us take pride in being able to prepare our own taxes. After all, there is a measure of satisfaction to be gained when you can say that you filled out all of the forms and took care of all of your own deductions and credits. Besides, if you get stuck, there are plenty of software programs that can guide you in your efforts to prepare your own taxes.

As fulfilling as it can be to do your own taxes, however, it’s important to realize that sometimes it is not in your best interest to take the time to do your own paperwork. In some cases, it’s worth spending the money to hire an accountant to prepare your taxes for you.

I, unfortunately, only discovered the true benefits of this after years of doing taxes on my own. Here are some suggestions to help you avoid making the same mistakes that I did:

How Complex is Your Tax Return?

The first question you have to ask yourself is this: How complex is my tax return? If you have a complex tax return, having a professional complete the paperwork can be a good idea. Someone with a basic 1040, and two or three schedules, might be able to effectively fill out his or her own tax return. However, if you have several schedules, and if you have a complex situation, or a special case, the knowledge of a professional can be invaluable.

Another consideration is whether or not you have other complexities, such as a business. If you have a business, you might need to fill out a separate tax form. In some cases, though, your forms will need to coordinate. As a result, it’s usually a good idea to have an accountant fill out both forms. Other complexities might include investments, retirement account withdrawals, special tax credits, and an other item that adds the number of schedules that your return requires.

Advantages to Having an Accountant Prepare Your Taxes

Paying an accountant to take care of your tax forms can provide peace of mind, as well as save you time. Here are some of the advantages of hiring an accountant to prepare your taxes:

Professional who knows the law: Tax law is always changing, and an accountant can help you keep track of the latest developments.
Representation for an audit: Most accountants guarantee that they will represent you to the IRS in case of an audit. Having a professional who knows your taxes can be a great help in this sticky situation.
Saves you time: Preparing your own tax return can be time-consuming, since you will need to look everything up. Your accountant can save you time, leaving you free to enjoy time with your family, or time to work and earn more money.

You do need to be careful when choosing an accountant, though, since some accountants are better than others. An accountant can’t guarantee that your tax return will be perfect, or that you will get all of the credits and deductions you are entitled to. But you have a better chance of having everything done properly, while avoid hours of frustration, if you hire an accountant.

Tax Liens, Levies and Seizures Grew Drastically in the Last 10 Years

Miranda Marquit — Mon, 2 Apr 2012 00:00:00 PDT

The IRS has been stepping up enforcement recently, with an increase in audits. Indeed, one in eight millionaires was audited during fiscal year 2011, according to the IRS. The IRS has also reported that it is increasing its efforts to catch tax evaders who move their money offshore.

It’s not just auditing that has increased over the years, though. There has been an increase in liens, levies and seizures during the last 10 years. From 2001 to 2011, the IRS has been more active in making sure that it receives the revenue it feels is due. The increase has been huge, far eclipsing the gains made by tax returns over the same period.

Capturing What’s Due

Over the course of the last decade, the IRS has been making a conscious effort to recover what is due. Tax return growth during 2001 to 2011 was only 10%. We hear a lot about the increase in tax returns, and money going back to citizens, but what we don’t realize that the IRS has been receiving much more back in terms of liens, levies, and seizures. Here’s how much each of those areas have grown:

Tax Liens: Increased 144.56%
Tax Levies: Increased 456.15%
Seizures: Increased 231.62%

It’s clear that between the audits and other measures, the IRS is boosting efforts to make sure that it receives what’s due.

What Are Liens, Levies, and Seizures?

In order to understand the way that the IRS has increased revenue growth with the help of liens, levies, and seizures, it helps to understand what these items are. You should also be aware of the ways that they can be used so that the government can get the taxes it feels are owed to it.

IRS Tax liens are placed on property. A tax lien is placed on the property, and that means that some of the value of the property is required to go toward tax payment. It’s a way that the IRS can ensure that some of the taxes are paid. If the property is sold, then the IRS gets its share. Property can include personal items, as well as financial assets, in addition to real estate.

Tax levies are essentially a seizure of your assets in order to help pay your tax debt. Your bank accounts, wages, investments, inheritances, IRAs, and even accounts receivables for your business, can be seized in order to discharge your tax obligation. When the IRS seizes your wages this is referred to as IRS tax wage garnishment.The fact that tax levies have increased so dramatically in the last decade is an indication that the IRS really is aggressively exercising its ability to just go for assets to cover unpaid taxes.

Seizures involve the taking of physical items. Levies are the seizure of intangible assets. Seizures, by contrast, involve actually personal property of value, which can then be auctioned off in order to discharge what you owe. This seizure can be your home or your car, or some other valuable personal asset. Unlike a lien, which requires that the IRS be paid back as a result of profits, a seizure is an outright taking of that property.

You do have the option to appeal liens, levies, and seizures, though. If you are subject to these actions, it’s important that you get a tax profesional to help with your appeal such an tax debt attorney, Enrolled Agent, or CPA.