Post Filing Issues
Actions the IRS May Take If You Do Not Pay Your Bill
The IRS wants to help businesses file and pay their taxes
promptly and efficiently. However, in order to make the system fair for all
taxpayers, the IRS must occasionally protect the government's interest when a
taxpayer neglects to pay a tax bill. These actions may consist of:
- Filing a Notice of Federal Tax Lien. If you
receive a bill and fail to pay and do not appeal, a tax lien may be filed. A
tax lien is a public document usually filed in a county courthouse or with a
secretary of state. It can impair your company's ability to borrow funds and
impact its ability to secure new business.
- Issuing a Notice of Levy. If you receive a
Notice of Intent to Levy and do not pay the balance due and do not appeal, a
levy may be issued. Levies are notices to banks, customers, or any other
entity that owes you money. The levy requires these entities to pay over
funds to the IRS rather than to the business that owes the tax. The funds
received by the IRS are applied to the taxes that are owed.
- Seizure of Property. In egregious situations,
the IRS may seize property that belongs to a business that owes taxes and
willfully neglects to pay them. Vehicles, real estate, and equipment are
examples of items that may be seized. The seized items may be sold at
auction. Funds from the sale are then applied to the taxes that are owed.
- The Trust Fund Recovery Penalty. If a business
fails to pay over employment or excise taxes, the IRS may assess the Trust
Fund Recovery Penalty against the persons responsible.
Each of the above actions comes with certain
appeals rights. See Publication
594, The IRS Collection Process, and Publication
1, Your Rights as a Taxpayer for complete information.
Important References
Publication
594
The IRS Collection Process
Publication
1
Your Rights as a Taxpayer