How To Check Your Tax Debt BalanceThe easiest way to determine if you owe the IRS money is by checking your federal tax account. To check your account:
- Go to IRS.gov/account
- Log into your account or sign up using the following information:
- Full Name
- Social Security Number (SSN) or Individual Tax Identification Number (ITIN)
- Tax filing status
- Current address
- View tax balance
How Does The IRS Notify Taxpayers of Tax Debt?In addition to updating your federal tax account with your balance owed, the IRS will send you a notice with the amount due. The IRS sends numerous notices to delinquent taxpayers; with each subsequent notice, the consequences increase in severity.
- IRS Statutory Notice of Deficiency: If you receive a CP3219 or LT3219 notice, the IRS is notifying you that you owe additional taxes on a tax return. This may mean they’ve performed an audit, your tax return doesn’t match taxable income information the IRS has received from other parties, or they’re performing an unfiled return investigation.
- Final Notice of Intent to Levy: If you’ve ignored previous notices and refused to get in contact with the IRS about settling your debt, you’ll receive a Final Notice of Intent to Levy. This means your case has been transferred to the IRS Collection Unit, who now have the authority to enforce collection through a lie or levy.
What If I Don’t Pay The IRS?Ignoring the IRS’s attempts to collect what they’re owed can result in some pretty harrowing consequences, including the previously mentioned tax levies and liens. Ignoring an IRS notice can cause both immediate and long-term issues.
- Substitute for Return: If you fail to file and ignore the IRS’s requests to do so, they may file a substitute for return. This takes the place of a regular tax return, and sees the IRS calculating your taxes for you, based upon your previous tax returns. This means you have no control over the deductions and credits given, and could see you spending way more.
- A Visit from the IRS: The IRS may send a tax revenue officer to your home. During these visits, they’ll ask you about your money situation and outline the various consequences you can expect should you choose to ignore your tax debt.
- Wage Garnishment: This tax lien sees the government taking a portion of your paycheck each pay period in order to start paying off your tax debt.
- Asset Seizure: There are some cases in which the IRS will seize personal assets to cover the cost of your tax debt. The IRS can seize virtually any personal asset, including your home, cars, boats, and other valuables; they will sell these items in order to repay your tax bill.
- Criminal Charges: Although rare and usually only applicable in cases of fraud, delinquent taxpayers could face criminal charges for tax evasion.
Tax Debt SolutionsIf you determine that you do in fact owe the IRS, it’s imperative that you resolve your tax debt as soon as possible. Fortunately, there are several solutions that can make paying off tax debt more manageable.
- Short-Term Extension: If you can’t pay your tax debt immediately, you can consider a short-term extension to pay which provides you with 120 extra days to pay off all of your taxes.
- Installment Agreements: If you won’t be able to come up with the necessary funds right away, you may consider applying for an installment agreement. Taxpayers who owe less than $50,000 or less qualify for this type of monthly installment plan. Once approved, you can pay through a direct debit option, which is the least costly of the options offered by the IRS.
- Offer in Compromise: Taxpayers who will never be able to pay off their tax debt in full without undue hardship may qualify for an offer in compromise. Should your request be accepted, the IRS will forgive a portion of your debt, letting you settle for less than the full amount you owe.