Wednesday, July 22, 2020

Taxing agencies filing a tax lien against the taxpayer.

The first type of collections is passive collection. Passive collection involves the taxing agencies filing a tax lien against the taxpayer. 

Tax relief

Typically, a lien is filed within the county in which the taxpayer lives. In this instance, there is no inherent call to action. Either the taxpayer owns real property to which a lien will attach, or owns no real property in which case the lien will exist, but cause little to no burden. 

Tax relief

In either case, a lien will not affect the day-to-day finances of the taxpayer. This may be quite a different story if the taxpayer is trying to purchase or sell real property. A lien may also affect the taxpayer if he or she is trying to purchase personal property. In these cases, a credit report comes into play, and the lien will raise issues. 

Tax relief

Unlike active collection, the taxpayer typically has time to plan when addressing their tax concerns if they are only faced with the threat of passive collection. Active collection on the other hand can affect the taxpayer more directly. 

Tax relief


If a taxpayer is facing active collection, they may be subject to having the funds in their bank accounts frozen, having their wages garnished (reduced) to amount equivalent to earning minimum wage, or having the vendors that would usually pay them, now be required to pay the IRS or the State instead. Active collection is used to “wake up” the taxpayer. If someone owing tax initially ignores delinquent notices, they have two choices. The first is to “fall off the grid” and bury their head in the sand. The second is to “fess up” by contacting the government and get into compliance so that they may reach an agreement amenable to both parties. It makes sense to contact the government prior to the commencement of collection activity rather than to wait until one is being actively collected upon. As arduous as it may be to address one’s tax concerns in general, it becomes exponentially worse when under a time constraint or with one’s funds frozen by the IRS or even worse…taken. In the following section of this manual Entering Into an Installment Agreement, you will learn how to prepare the paperwork necessary to enter yourself into an agreement. Note that this manual is geared toward submitting an IRS installment agreement or Offer in Compromise. If you are planning on submitting a State installment agreement or State Offer in Compromise the principles herein will apply but the forms will vary. 

No comments:

Post a Comment