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What are the Various Collection Actions?

What are the Various Collection Actions?

There are several words and phrases particular to the collection process. Below, the IRS has defined some of the most common collection terms:

Federal Tax Lien: A legal claim against all your current and future property, such as a house or car, and rights to property, such as wages and bank accounts. The lien automatically comes into existence if you don’t pay your amount due after receiving your first bill.

Notice of Federal Tax Lien: A public notice to creditors. It notifies them that there is a federal tax lien that attaches to all your current and future property and rights to property.

Levy: A legal seizure of property or rights to property to satisfy a tax debt. When property is seized (“levied”), it will be sold to help pay your tax debt. If wages or bank accounts are seized, the money will be applied to your tax debt.

Seizure: There is no legal difference between a seizure and a levy. Many times, the IRS uses both terms interchangeably.

Notice of Intent to Levy and Notice of Your Right to a Hearing: Generally, before property is seized, the IRS has to send you this notice. If you don’t pay your overdue taxes, make other arrangements to satisfy the tax debt, or request a hearing within 30 days of the date of this notice, they may seize your property.

Summons: A summons legally compels you or a third party to meet with the IRS and provide information, documents or testimony.

Passport Actions: The Department of State will not issue or renew a passport to any individual who has been certified by the IRS as having a seriously delinquent tax debt and may revoke a passport previously issued to such individual.

Next week: Additional information on the IRS Federal Lien

(IRS Publication 594 and (TTT 01/28/20)