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Once the IRS exhumes all effort to collect taxes from you and failed, the next step the agency will take is to file a tax lien. This is a serious matter which should not be taken lightly. Once this tax lien is enforced on your salary, this will destroy not only your credit standing but also your reputation.

To avoid a tax lien, you need to do something about it right away. You should start by learning as much as you can about it. Then look for ways that can help you best avoid it. To help you out, here are a few things you can do:

Immediately contact the IRS once you receive correspondences from them. It is best to speak to them about your tax situation. Dont ignore the IRS or their mailings because they will not show you mercy.
When you talk to the IRS, make sure you respond to them politely. This can go a long way in terms of averting a tax lien.
For the years you were not able to file your tax returns, you should start doing it now. Even if you thought back then that you were not taxable or you just forgot to file them, the IRS will still require you to file those back taxes. This is also a good way to show them how serious you are, especially when it comes to paying off your balance.
In case youve been audited and it showed that youve misrepresented your tax figures, it is better to step forward with the truth. This is the best way to get the help you need and get back on your feet.
Pay them with whatever payment you can. This way, theyll know how serious, sincere and determined you are to pay your tax dues.
Dont decline to give payment. It is better to offer to pay no matter how little you can only afford.
Get professional help. Find an expert who can help you solve your IRS problems.

Finding ways to avoid an IRS tax lien is so much better than finding ways to get rid of it. Through simple ways, you can resolve your issues with the IRS. It just takes a little honesty, initiative and commitment. After all, it is your obligation to file those tax returns and to pay your taxes.

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Tax penalties from the IRS are typically due to people failing to file their required tax forms on time or neglecting to pay the full amounts that they owe to the government. The best way to avoid facing IRS penalties is to know in advance what causes them. Below are some of the most common actions leading to tax penalties:

1. Late filing or failure to file as mentioned before, late filing is one of the most common violations of tax regulations, and actually gets worse the longer you leave it. The mistake most persons make once they miss the filing date is to keep putting off filing their returns because they cannot pay the due billwhen, in fact, any IRS representative or tax counsellor shall tell you that it is better to file even then, regardless of your inability to pay the due taxes. This is because the penalties for late filing actually stack up: for instance, you shall be charged 5% each month that you are late, up to a maximum of 25% for your total due taxes. If you foresee yourself having trouble filing on time in the future, just give your IRS representative a call and request a deadline extension for filing (not for paying, take note). The IRS actually grants these for free.

2. Late payment or failure to pay another common violation, this has its own penalty similar to the one in place for late filing cases. However, unlike the late filing penalty, there is no cap on charge. It starts at a much lower rate than the failure to file penalty, fortunately, at 0.5% each month. To avoid getting bitten by this, just make sure to pay as much of what you owe as soon as you can. If there really is too much of it for you to handle easily, you may apply to the IRS for what they call an Installment Agreement. This means you can make periodic payments for your dues.

3. Understatement in tax accounts and files sometimes, the IRS may actually conduct an audit on you if the information you provide in your files is considered to have been understated, exaggerated, or inaccurate. When this happens, the IRS can impose a tax penalty of 20% on you. This is just for lighter cases, mind you, as grosser instances of exaggeration or understatement are often classed in an entirely different category: that is, as tax fraud. Such cases get far worse penalties and punishments, so you do not even want to come close to being considered a perpetrator of such acts. The simple rule is to be as accurate as possible and keep your accounts and documents in good order. This way, there is little chance of you having to deal with an inaccuracy penalty.

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