How Tax Authorities Can Collect Your Back Taxes
If your tax bill goes unpaid and you don’t make arrangements to pay your debt before the due date, the first step in the forcible collection of your debt is a tax lien on your Denver-area property, which is how the IRS protects the debt.
A lien is a legal claim against your real estate, personal property and financial assets, filed via a public document known as a Notice of Federal Tax Lien. The lien alerts your creditors and finance companies that the IRS has a legal right to your property to the extent of tax you owe and remains in effect until the taxes are paid in full or other arrangements are made. Liens can damage your credit and make it impossible to move forward in your financial life.
Once a federal or state tax lien is filed, you may also face the possibility of a tax levy to legally seize your property and assets to satisfy your debt. A levy can freeze your bank account, garnish your wages or seize your assets, including your retirement accounts, state and federal income tax returns and stock accounts, and property, such as your home, car or boat.
If your company faces a levy or lien, it’s important to deal with your tax problems as quickly as possible to minimize the impact on your finances.