1040 Tax Credit

Avoid IRS Collections

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How to Avoid IRS Collections: Liens, Levies & Wage Garnishments Explained

If you owe the IRS, you risk serious collection actions, including tax liens, bank levies, and wage garnishments. Understanding how these work—and how to prevent them—can help you protect your finances.

What Happens If You Don’t Pay the IRS?

When taxes go unpaid, the IRS has the legal right to collect through various enforcement actions:

🚨 Tax Liens (Claims Against Your Property)

  • The IRS files a Notice of Federal Tax Lien, making it public record.
  • Liens can affect your credit score, making it harder to get loans.
  • The IRS can seize real estate, vehicles, or business assets.

✅ How to Avoid It:

  • Set up a Payment Plan to stop liens.
  • Request a lien withdrawal if you qualify.

🚨 Bank Levies (Freezing Your Bank Account)

  • The IRS can freeze and seize funds directly from your bank.
  • Once issued, banks must hold funds for 21 days before transferring them to the IRS.
  • This can leave you without money for rent, bills, or daily expenses.

✅ How to Avoid It:

  • Contact the IRS before the levy is issued.
  • Negotiate an Offer in Compromise if you can’t afford payments.

🚨 Wage Garnishments (IRS Takes Part of Your Paycheck)

  • The IRS sends a wage garnishment order to your employer.
  • A percentage of your paycheck is withheld and sent to the IRS.
  • Garnishment continues until the debt is paid or you set up an alternative agreement.

✅ How to Avoid It:

Ways to Stop IRS Collections

If the IRS has already started collections, you can still take action:

✅ Apply for an IRS Payment Plan – Prevents most collection actions. ✅ Request Penalty Abatement – Reduces or removes penalties. ✅ Submit an Offer in Compromise – Settles your tax debt for less. ✅ File an Appeal – If you believe the IRS acted unfairly, you can challenge their actions.

🔗 Learn more: IRS Penalties & Interest Explained

Final Thoughts

If you owe taxes, don’t wait for the IRS to take action. Avoid aggressive collections by setting up a plan before it’s too late.

🚀 Next Steps:

  • Check if you qualify for an IRS Payment Plan.
  • Consider applying for Tax Debt Settlement if eligible.
  • Act now to prevent IRS collections before they start.

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