While it may seem obvious to most, delinquent taxes refer to any amount of money that is owed to the Internal Revenue Service. Most people think of tax delinquency as a long-overdue tax bill, like a year or more.
Technically an account is considered delinquent as soon as the due date for the tax return or whatever established liability has passed and the amount owed remains unpaid.
You will normally not receive any sort of notice from the IRS immediately, but if you allow the tax to remain unpaid you can be sure a notice will arrive.
In the case that you have delinquent taxes, it’s important that you act as quickly and swiftly as possible in handling the situation, as there are major repercussions to not paying your taxes.
What happens if a taxpayer does not pay delinquent taxes?
Most immediately penalties and interest will accrue on top of the outstanding amount. Once the IRS decides that your taxes are ‘delinquent,’ they’ll start tacking on penalties that will worsen the longer the outstanding amount remains unpaid.
Interest on the outstanding balance also begins accruing. If the taxes remain unpaid, and no agreement has been reached, a Revenue Agent is then assigned to your specific account and they’ll reach out to you in order to resolve the issue.
What happens if there’s no response or payments during the collection period?
There’s a possibility that if the delinquent taxpayer is being noncompliant, the IRS will issue an assessment and then go on to issue a tax warrant.
This tax warrant covers the initial outstanding amount and then the interest and penalties that have accrued throughout the process. If the tax warrant is not paid within a certain amount of time, for whatever reason, then the case is filed through the county Superior Court.
Then there’s a possibility that liens come. A tax warrant basically establishes a lien against personal property or any asset that could be used to pay off the debt owed. This includes property of any sort, automobiles, wages, and even bank accounts.
Once the case is filed, it then becomes legal for the IRS to take your property or put a hold on your bank account – they can even go as far as to take the money from the bank themselves after a respective amount of time has passed.