It should be obvious that the best way to avoid getting into hot water with the IRS is to follow the law by always paying your taxes, paying them on time, and paying all that you owe. Sometimes we miss income on our return or forget to pay tax on gains, though. It can quickly become a costly mistake or oversight where the IRS will jump in and look to collect. Here are some ways to keep your assets protected from the IRS.
Stay Tax Compliant
Simply put, pay your taxes, and pay them on time. Avoiding this tip is the quickest and easiest way to find yourself in trouble with the IRS. When you don’t pay your taxes or you don’t file your taxes, the IRS knows and will collect what they are owed, plus interest and fees. Avoid this situation by remaining compliant.
When you file taxes, you have to report all of your income. If you don’t, the IRS will take notice. You may not hear anything from the IRS for several years, but that doesn’t mean they can’t come back to you and collect back taxes, interest, and fees.
If you are married, file separately. If one spouse has an issue with their return, it won’t impact the other spouse. This is a simple and effective way to ensure that at least one of you is protected from IRS scrutiny.
Believe it or not, the IRS does want to resolve your tax liability. They are more likely to be lenient with you if you are proactive and responsible about your tax situation. If you run and hide, the IRS will find you and they will collect.
What can the IRS take?
You don’t want to lose any assets, which is why you should begin your asset protection plan now. If you don’t, you could be subject to losing certain assets to IRS collection:
- Wages – this includes your normal wages but can also include rental income
- Bank accounts – the IRS can seize your bank accounts to repay debts owed
- Retirement funds – the IRS can access your retirement funds to repay the debt you owe
This is why having an asset protection plan is so important. You can quickly lose many assets to the IRS, even though there are few pieces of property the IRS can’t touch. The items they can’t touch won’t leave you with very much. Why put all that at risk? All you have to do is be proactive and plan ahead.
Protect Your Assets Before You Need To
A skilled asset protection lawyer will know how to help you protect your assets. He or she will sit down with you, work with you, and create an asset protection plan unique to you. Don’t delay in contacting one as you should make sure this asset protection plan is put in place before you actually need it.