What is the IRS role in the American government? The IRS is the American government collections agency. Just like a credit card or a bank collections agency, their sole purpose is to make sure you pay the US government. Side stepping the entire philosophical debate regarding whether the US government has the moral authority to take money from it's citizens, the IRS has been given some serious powers by the US Congress to conduct its job a collection agent. Among those powers is the power to place levies and liens on your property and income.

A levy or a lien is a notice from the IRS that they have, or will shortly, start garnishing your wages, seizing your property, or any combination in order to collect on the tax debt you owe the government. The IRS does not arrive at this action lightly. Taxpayers only end up in this situation when they have ignored multiple prior IRS notices to either discuss, dispute, or otherwise collect on the tax debt.

Although this is one of the most drastic steps that the IRS will take in trying to collect on a tax debt, it is not the final step for the taxpayer. A taxpayer still has rights and legal protection even after a tax lien is filed.  The following are some of the steps you should take when you are faced with a tax lien or tax levy.

(1) Find effective representation. Taxpayers can represent themselves or hire representation in their dispute with the IRS. The IRS must allow the taxpayer the opportunity to dispute or discuss the IRS assessment. This is your opportunity to either reduce the overall amount of your tax debt or completely wipe it out through negotiations with the IRS.

(2)  You can dispute the IRS assessment. The IRS will give you a tax debt owed based on the least favorable determination of your income and taxes. You can use all allowable tax credits, adjustments, and deductions to lower that taxed owed. This is where a professional knowledgeable in tax rules will be able to help you save money. He will be able to lower you tax bill, and when the deductions are legitimate, the IRS must accept the lowered amount.

(3) Offer in compromise. This is an IRS program that allows taxpayers to lower the overall amount of tax debt. You must first agree with the IRS on the amount owed. Then a process of negotiation will start in order to determine the actual amount that you can actually pay the IRS from the total amount owed. The IRS will take into consideration many factors to include your current and future earnings, any mitigating circumstances such as health issues, marital issues, criminal victimization issues, and many other factors that the IRS has the discretion to take into account. Contrary to popular belief, the IRS is not out to take every last drop of blood from you. They want to get paid, but they are also realistic in terms of how much they will actually get paid.

(4) Payment plans. Once a balance due is agreed upon, then you can negotiate a payment plan. The IRS will take into consideration your other living expenses when it determines how much you can pay the IRS in monthly installment payments. Interest and penalties will continue to accrue on the principal during the payment plan.

Many taxpayers have come to Astoria Tax Service with tax levy and lien notices. I want you to understand that although this is a serious matter, this is not a death sentence. With effective and knowledgeable professionals working on your side, we can work out a more favorable outcome for you with the IRS.