The Internal Revenue Service (IRS) has issued an official notice to all taxpayers outlining the consequences for failing to comply with tax responsibilities at the appropriate time. You will be able to determine the exact amount that must be paid in order to be released from the levy by calling the number shown on your notification. Failure to contact the agency immediately may result in a seizure, which is based on the legal seizure of a taxpayer’s assets to pay the tax debt.
If we look at the revenue agency, we can see that there is an automatic penalty applied when a tax due is not paid after receiving the first invoice. The penalty is a legal claim on all of the taxpayer’s property, both current and future, including salary, home, vehicle, and bank accounts.
What Should I Do If I Receive This IRS Penalty?
According to the government, when a Notice of Federal Tax Lien is issued, the taxpayer must immediately pay the full amount owed. The government clarified that the Notice of Federal Tax Lien only discloses your assessed debt as of the notice’s date. It does not reflect the outstanding balance to pay off the debt, nor does it include our fees for filing and discharging the lien.
To find out the exact amount to be paid in order to be released from the tax, call the number on your notification. Failure to notify the agency promptly may result in the implementation of a seizure, which is the legal seizure of a taxpayer’s assets in order to pay the tax debt.
Reasons Why the IRS May Exempt a Taxpayer from This Penalty
The release of the federal tax lien indicates that the authorities have withdrawn the lien against your debt by filing a Federal Tax Lien Release Certificate with the proper authorities. According to the IRS, this action can be cancelled in the following circumstances:
- The debt is completely paid.
- A bond secures the payment of the loan.
- The payment criteria of an Offer in Compromise that the IRS accepted were met.
- The collecting time has ended, thus release is automatic.
We may charge interest on a penalty if you do not pay it in full. We apply penalties every month until you pay the full amount owed. Understand the various types of fines, what you should do if you receive one, and how to prevent receiving one.
How do you know you owe a penalty?
When we charge you a penalty, we will send you a notice or letter. The notification or letter will explain the punishment, the basis for the charge, and what you should do next. Make sure the information in your notification or letter is correct. If you can remedy the issue in your notice or letter, you may not face a penalty.
Types of Penalties
We send notifications and letters regarding the following penalties:
- The term “information return” refers to taxpayers who fail to file or furnish their necessary information return or payee statement on time.
- Failure to file occurs when you do not submit your tax return by the due date.
- Failure to pay occurs when you do not pay the tax owed by the due date.
- Accuracy-related applies when you do not claim all of your income or claim deductions or credits for which you are ineligible.
- The erroneous claim for refund or credit penalty occurs when you file a claim for refund or credit of income tax for an excessive amount without acceptable grounds.
- Failure to deposit occurs when you do not pay your employment taxes correctly or on time.
- Tax return preparers who engage in wrongdoing face penalties.
- Dishonoured checks or other forms of payment occur when your bank fails to honour your check or other type of payment.
- Corporations underpay anticipated taxes when they fail to pay them accurately or on time.
- Individuals who fail to pay anticipated taxes accurately or on time are considered to have underpaid.
- International information reporting pertains to taxpayers who fail to record foreign-sourced financial activities on time and correctly.
