People know that those who have been through IRS problems have gone through a great deal of trouble, to say the least. Although some of these stories seem outrageous, the fact is, they actually happened. The IRS is really strict in implementing its collection methods on those whom they deem have owed them any amount of money. It doesn't matter whether the money is truly owed or it was just a result of an error on their part as the IRS will really collect from you. As a taxpayer, it becomes your ultimate responsibility to protect yourself especially in situations when you're not guilty of tax violations. This is because even those who have conscientiously settled their taxes are not immune to problems than result from the mistakes of the IRS.
One of the worst IRS problems that you'll have is when the government agency decides to impose a Federal Tax Lien on you. This shows up on your credit record, and you'll absolutely not acquire loans of any type. The banks will basically stop entertaining you with regards to loan applications. In fact, banks are so stringent of anyone who has a Federal Tax Lien that they won't even allow you to open a new bank account. Depending on your case, this will make it extremely difficult for you to pay simple bills such as the phone or electric bill.
Thinking that IRS problems will just work themselves out is erroneous. You only have two choices in dealing with this matter: pay the money or assert your rights to the IRS. However, these two options will require you to invest both time and money.
As soon as you receive a notification from the IRS, it's always in your best interest to immediately do something. Doing otherwise is like giving the IRS the authority to enforce rigid collection techniques and interest rates that go up to 25%. You will continue being subjected to these consequences until the debt is completely paid, or until the charges are dismissed.
Another significant thing to bear in mind when dealing with IRS problems is that you should ensure that all documents and pieces of evidence are in order. Doing this will help you deal with the IRS agents in a timely manner, and it will also force them to understand that you're prepared for whatever they will throw at you. When circumstances are already beyond your capacity, it's best to seek professional help. Tax lawyers and CPA's can very well help you in dealing with these problems.
Aside from the usual penalties that the IRS enforces on delinquent taxpayers, they can also utilize more aggressive collection techniques like wage garnishment. This is called a Wage Levy. You don't want the IRS to take this action because this allows them to get as much as 75% on your paycheck. Could you live with only 25% of your take-home pay?
The sooner you deal with your IRS issues, the sooner you will be able to negotiate with the IRS and the harder it is for them to enforce such aggressive and intrusive methods on your finances.