Paying taxes is inevitable, and despite the fact that no one actually relishes the idea of writing a big check to Uncle Sam, it’s part of one’s annual (or quarterly) taxpayer obligations.
Not paying taxes by their scheduled due date can have some major legal consequences, including accumulating substantial interest and penalties, being subject to involuntary wage garnishment, a bank account levy, wage garnishment, or a tax warrant.
Keep reading to get the answer to the question, “What is a tax warrant?” and find out how to resolve it once one has been issued.
A tax warrant is issued by the IRS or a state tax agency as a result of someone having unpaid taxes. Once issued, it becomes a part of the public record that a party has unpaid taxes, and the government has put the public on notice that this person has delinquent taxes and legal action is being taken.
When a tax warrant is issued, the government has the legal right to close your business and seize certain property. In a property seizure, vehicles, equipment, and other valuables are sold by the government, and the proceeds from the sale are applied to the tax debt.
In knowing “what is a tax warrant?” you may have heard the terms tax lien and tax warrant used interchangeably, but there is indeed a significant difference. With a tax lien, the government attaches a claim to property to secure payment for unpaid taxes. When the delinquent taxpayer sells the property, the government will end up ultimately being paid out directly from the proceeds of the sale.
A tax warrant, by contrast, functions more like a formal notice of tax delinquency. It’s often one of the first steps that occur before a tax lien or other actions, such as a wage garnishment or tax levy, are issued.
After finding the answer to “what is a tax warrant,” it’s important to realize that one missed tax bill or a single season of unreported taxes won’t immediately result in the issuance of a tax warrant. Instead, there’s a specific process the government must follow in debt collection methodologies before the situation escalates to a tax warrant.
Here are the steps:
After finding out the answer to the question of what is a tax warrant, it’s a good idea to know how to resolve it.
Fortunately, there are several ways to resolve a tax warrant, including the following:
Knowing the answer to the question, “What is a tax warrant?” and being able to resolve it are two distinct issues. At Levy & Associates, Inc., we have decades of experience helping people with tax issues. To learn more about our services or request a consultation, call 313-447-1704 or contact us online.
Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.
There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.