5 Ways Tax Debts Can Be More Dangerous Than Other Debts

Do you owe outstanding taxes, have failed to file any taxes, or need to dispute any tax bills? Resolving these issues should take priority even over other creditor issues you may face. Why? Here are five ways that tax debts can be more dangerous than civil debts. 

1. Tax Liens Are Hard to Remove

A tax lien is a notice attached to an asset that prevents the taxpayer from selling the item without satisfying the debt first. This type of legal tool is often seen with cars and houses but, unlike taxes, most Americans' other debts do not put any actual property at risk. A tax lien might even survive bankruptcy. Because of this unique nature, tax debt is a more long-lasting problem than a civil creditor. 

2. Not All Tax Debts May Be Visible

Once you take out a loan or get a credit card, it becomes a permanent part of your credit history and eligible for things like bankruptcy protection. But to make tax issues eligible for any kind of resolution, you must first ensure that you even know what they are. If you failed to file any year's tax forms, you are liable for that debt.

3. Tax Levies Can Seize More Assets

Creditors can seek a court judgment to seize assets, like a bank account or wages, to satisfy debts. But their powers are limited to liquid assets, not things that must be sold. The IRS and some state tax agencies, though, can do more. Tax levies are calculated differently than civil garnishments, and the result may be the seizure of more money. Tax agencies can also seize tax refunds and even certain hard assets like a car or home. 

4. Tax Agencies Have Different Procedures

Civil creditors face a long process in order to garnish wages or seize assets. They must wait a proscribed length of time and provide a certain number of legal notices, then go to court to receive a judgment and attend other hearings to actually enforce that judgment. Taxes are collected through a different legal process, with which most debtors aren't familiar. Failure to follow these unique steps can ruin your case. 

5. Tax Debts May Affect Employment

Bad credit history can be a problem for some workers who want jobs in security or the government. But owing back taxes as debt is a bigger risk as tax agencies are less understanding than civil employers. Employers may find your name on public records of debtors and anyone working in finance may find themselves restricted in employment by the IRS. 

Where to Find Resolution

Clearly, tax debts are something to prioritize no matter whether they're your only credit issue or one of many. Get started by meeting with a tax resolution service in your state today.