How Far Can The IRS Go To Collect Your Taxes?

The answer to that question is “pretty far,” according to David Isaac, managing attorney at Flat Fee Tax Service, Inc. Mr. Isaac states that the Internal Revenue Service (IRS) is known as the nation's most powerful collection agency for good reason.

IRS Tax Collection Procedures

According to IRS tax collection procedures, the IRS can do a number of things in order to collect what you owe, such as:
  1. Attaching wages - An IRS wage levy; One IRS tax collection procedure allows the IRS to levy between 30-70 percent of a taxpayer’s wages to pay for a tax debt. An IRS wage levy is "continuous" which means it will continue to seize your paycheck until your tax debt is paid in full or the wage levy is released.
  2. The IRS can levy Social Security income; however, they are limited in the amount they can levy. The Federal Payment Levy Program allows the IRS to seize 15% of your Social Security check. Same goes for Social Security Disability (SSDI) and Veterans checks. This is also "continuous".
  3. Bank Levy - The IRS can seize the funds in your banking account. This is a "one-time seizure". Your bank will hold your funds for a 21 day period. This includes Saturdays, Sundays and holidays. During the 21 days, you can try and keep your money. It is extremely difficult to have the IRS release bank funds that have been seized. It would be best to have an experienced IRS Tax Attorney handle your IRS bank levy.
IRS Notices - Tax Debt

Putting Federal Tax Liens on property

Another IRS tax collection tactic is to place a federal tax lien on any property that you own, such as your home, business and even your car. A federal property lien stays in effect until the IRS tax debt is paid in full, the debt expires or it is released.

Seizing assets. Finally, IRS tax collection may include seizing assets. While this is incredibly rare, the IRS will use this method in large tax avoidance schemes. The IRS often uses property seizures to make a public statement that if somebody tries to abuse the tax system, they will seize their property.

IRS tax collection limits: Are there any?

Although it’s clear that IRS tax collection abilities are far-reaching, Tax Attorney David Isaac assures us that disputing tax debts is an option and that the IRS does have limits when it comes to tax collection. The IRS must give every taxpayer multiple chances to resolve their IRS tax debt before they enforce collection action. 

Also, before attaching an IRS tax levy to a taxpayer’s bank account or wages, the IRS must send a final notice, giving the taxpayer 30 days to dispute the collection action being proposed or to make the full payment.