Daniel Rosen explains what the IRS does when you don't pay taxes: they place liens on your property and can seize your assets, bank accounts, and wages through levies. Liens don't show on credit reports anymore but stay public, so lenders still find them.
Don't make a big mistake this tax season. Every year a bunch of Americans receive a refund on their taxes and about 25% receive a bill which you do need to pay. If you don't pay them, the government can place a tax lien, which is a legal claim on your property or assets. If the tax bill remains unpaid, the tax lien can become a tax levy, which is the legal seizure of your property, assets, bank accounts and wages. Tax liens used to show up on your credit report, but because of too many reporting errors, this practice was stopped a few years years ago. But just because they don't appear on credit reports anymore doesn't mean there's no financial impact. Tax penalties like liens and levies are all public records. Lenders can still find them and use them to decide your financial future. So avoid tax penalties whenever possible. If you can pay your taxes on time and in full, pay them. Just don't overextend yourself and go into worse debt to pay them. Tune into my podcast for more expert tips.
