Chances of being audited by the IRS? Less then 3% of the total .US taxpayers are audited by the IRS. The chances of being audited increase for people with higher income, blatant errors on their tax return, or complicated tax returns. What if I am unable to file my tax return by April 15th?
You will need to obtain and file a form 4868-Application for Automatic Extension of Time to file Income tax return. The form must be sent to the IRS by April 15th using a "good faith" estimate of tax you will owe for the previous year. The deadline for your return is then extended to August 15th. A second tax return extension is available only with good cause to further extend your deadline to October 15th.
What is a "Tax Lien"?
The Biggest Mistakes By Taxpayers?
B) Failure to respond to tax agency correspondence
What is the "IRS Tax Levy"?
An IRS Levy is another form of Collections action similar to a Lien, except that whereas a Tax Lien is a declaration that the IRS has a claim on a taxpayer's assets due to a tax debt, a Tax Levy is effectively a seizure of certain assets in order to satisfy that tax debt. A Levy is most frequently placed on relatively liquid assets, such as bank accounts and securities, but the IRS can and will sometimes Levy real and physical property, such as a taxpayer's house, car, boat, etc. In addition, the IRS may also Levy a person's wages and/or a business's Accounts Receivable. In the case of a Wage Levy, the IRS will contact the payroll department of the taxpayer's employer and request that they withhold a portion of that taxpayer's wages or salary and pay it directly to the IRS instead - and the employer has no authority to refuse.
The IRS will issue a Levy only after they have assessed the liability and sent the taxpayer a Notice and Demand for Payment; if the taxpayer subsequently neglects to respond or refuses to pay, then a Notice of Intent to Levy is sent at least 30 days before the Levy goes into effect. This notice acts as a final warning. If the 30 days lapse without the debt having been repaid, the Tax Levy takes effect. When the IRS Levies a bank account, the bank is obligated to place a hold on the funds for 21 days, after which the money must be sent to the IRS as payment against the tax debt.