In Georgia and across the United States, people who have fallen behind on their taxes or have other issues making it difficult for them to pay what they owe face constant concern that the Internal Revenue Service will step up its attempts to collect. In some cases, that might include seizing property.
In the past, that was limited to tangible items like a home, automobiles, bank accounts, stocks, jewelry and more. Now, there are other ways the IRS can pursue people who have not paid their taxes and it is imperative to know them and take steps to be protected.
Digital currency could be an IRS target in 2021
In today’s world, digital currency is growing in prominence. With that, the IRS is trying to collect on past due taxes by pursuing this currency. People who are concerned about how their finances can be damaged by the IRS’ aggressive tactics should be cognizant of their options and think about ways to settle their debts before it rises to the level of IRS seizure. For those who own digital assets like crypto and are already behind on their taxes, it is useful to be up to date as to what is on the horizon.
A deputy counsel for the IRS informed the American Bar Association that it categorizes digital assets much as it does the above-mentioned items and views it as property that can be subject to seizure. Much like other properties, it will take the digital asset and sell it to settle the debts. This will include bitcoin, which is rapidly growing in popularity for investors with a growing number of companies accepting it as payment.
A key has been the IRS gaining access to who has bitcoin through its access to data from exchanges like Kraken and Coinbase. If the owner has it in a different location, it is more difficult for the IRS to access.
There are currently strategies that crypto traders and owners use to shield themselves from tax liability, but it is possible that the IRS will address that in the future as well. Other countries like South Korea have initiated pursuits of people and companies who have avoided taxes with crypto and seized these assets from more than 1,500 individuals and 676 companies.
Combating IRS collection practices may require legal help
Whether a person owns digital assets or not, this is an example of the lengths the IRS will go to in trying to collect on what it says it is owed in tax debt. People do have alternatives to fight the IRS no matter how intimidating it might seem.
For example, when there are accusations that a person owes back taxes, he or she might have a viable case to show that they are current on payments. There might be a lack of resources to pay what is owed. Or it might be a special case in which the person can be granted some form of relief.
Before automatically thinking the worst or outright avoiding the reality of being pursued by the IRS for back taxes, it is wise to think about how to address the problem head on. Negotiating a settlement is possible, but people who are neophytes in these cases often make mistakes in agreeing to what they will pay or in negotiating.
If the accused debtor wants to come to an agreement or fight the attempt to collect on the debt, it is beneficial to have legal guidance. Consulting with professionals who have more than two decades’ experience can assess the options and try to come to a workable solution.