If you don’t pay the amount the IRS says is due, they may seize (“levy”) any state tax refund you may be entitled to receive. This is your Notice of Intent to Levy, as required by Internal Revenue Code section 6331(d).
If you still have a balance due outstanding after they seize (“levy”) your state tax refund, the IRS may send a notice to you that gives you the right to a fair hearing before the IRS Office of Appeals (if you have not previously received such a notice for that tax year). Then IRS may then seize, levy, or take possession of any of your other property or your rights to that property.
Your Other Property includes, but is not limited to, your:
- Wages, real estate commissions, and other income
- Bank accounts
- Business assets
- Personal assets (including your personal automobile and primary residence)
- Social Security benefits
If you don’t pay the entire amount due — or call the IRS to make other payment arrangements – it is quite possible that the IRS may file a Notice of Federal Tax Lien on your property at any time, if they haven’t done so already.
Once the lien is in place, you could find it difficult to sell or borrow money against your property. This tax lien will also appear on your credit report ― which could harm your credit rating ― and your creditors could also be publicly notified that the IRS has priority to seize your property.