Words can play tricks. There are some good tax words like refunds and overpayments. Other words like underpayment, interest, and penalties are words most taxpayers would like to hear but they are not like the next three words. So what are the three words taxpayers don’t want to see are:
An audit is just a review of your tax return. The audit can be a desk review or a formal (in person audit). A desk review is where you mail the requested information to an IRS agent. A formal in person audit is where you meet with an IRS agent at either the A IRS office, your place of business, or your tax preparer’s office.
A garnishment is where a tax authority garnishes your wages or tax refunds to pay an outstanding tax liability, student loans, or child support.
A levy is where a taxing authority seizes property, bank or investment accounts to pay an outstanding balances. A levy is usually sent to a taxpayer when a tax liability goes unanswered by the taxpayer. A taxpayer will get a notice with an intent to levy before the taxing authority will levy.
Tax notices are just way of life from the IRS, State, and Local tax authority. A point to remember when getting a notice is to respond to the notice either yourself, or through a tax preparer (CPA, tax attorney). It’s when you don’t respond that you see the word “levy” that makes you jump to action.
What words to you not like to see from from Federal, State, and local tax authorities?
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