The IRS has immense collection power, so they can place a levy on your property, garnish your wages, or even take away or suspend your professional license. To prevent this, work with a tax resolution specialist who can help you access the IRS’s forgiveness program. There are several options that allow you to spread out your payments and reduce your bill.

A doctor stressed out and wondering if the IRS will take his medical licenses for the back taxes he owes.

What Can the IRS Take for Back Taxes?

The IRS can take the licenses of nurses, doctors, contractors, and small businesses who don’t pay their taxes on time. Farming and fishing licenses can also get suspended. The affected person might be able to continue working with a restricted license, or they might be suspended without payment. In the latter case, they won’t be allowed to return to work until they file their tax return and pay their taxes. Sometimes, citizens can petition to have their license reinstated.

The government can also place a tax lien on property, garnish wages, and take money from bank accounts, Social Security benefits, and retirement earnings. Sometimes, levied assets like houses and cars are seized and sold to pay the outstanding debt.

Can the IRS Take Away My Driver’s License or Passport?

Aside from the professional license, the IRS can also take your driver’s license and passport. Depending on your situation and area, they might prevent your driver’s license from being renewed, or they might suspend your current one.

Your passport might be seized so you can no longer travel to a different country. If you’re outside the US and you try to return, you might be apprehended at customs.

How to Prevent the Suspension of Professional Licenses

The IRS offers several solutions to taxpayers who aren’t able to pay their bills on time. Negotiate with them as soon as possible to avoid being convicted for tax evasion.

The easiest option is the installment agreement, which allows citizens to set up a payment plan. People who don’t have enough money to pay taxes can make an offer in compromise or get “Currently Not Collectible” status. They can also make an appeal.

Making an Installment Agreement

The easiest solution is the installment agreement. It allows delinquent taxpayers to break up their payments into manageable chunks. Once an installment agreement has been set up, taxpayers no longer have to worry about levies, loss of income, professional license suspensions, driver’s license suspensions, and other consequences.

If you only owe the IRS a few thousand dollars, you can set up your own agreement online or over the phone. However, you need the help of an expert if you owe large amounts because the government will ask for details about your situation.

Making an Offer in Compromise

People who believe they can’t pay their taxes, despite their best efforts, can make the IRS an offer in compromise and get a part of their debt written off. This is a very popular option because it reduces the tax bill of the person or business.

However, the offer in compromise is hard to access because the IRS believes that most people can eventually settle their tax debt. Only around one-third of OICs get accepted.

Getting Currently Not Collectible Status

Taxpayers who don’t currently have an income or are barely able to pay for their basic expenses can request “Currently Not Collectible” status. They won’t have to pay their tax bill until their situation improves.

However, this status is temporary. Interest and penalties keep accumulating on the person’s account, so their debt grows.

Filing an Appeal

If you believe your tax bill is too high or that the IRS has made a mistake, you can file an appeal. This involves completing and submitting Form 9423. As soon as the IRS receives this form, all collection activities stop temporarily.

What About State Taxes?

Like the IRS, the Washington State Department of Revenue can suspend your professional license, apply penalties to your account, or even seize your assets. Certain states’ collection efforts are just as aggressive as the IRS’s, so it’s important to pay on time.

If you’re worried about your state taxes, speak to us. We can help you set up monthly payment plans, make an offer in compromise, or receive penalty relief.

How Long Can the IRS Legally Collect Back Taxes?

The collection period expires 10 years after the assessment of tax liability. At that point, any unpaid tax can no longer be collected. This means that people who have “Currently Not Collectible” status for more than 10 years won’t need to settle their tax bill.

When Are Business Licenses Reinstated?

Professional licenses and driver’s licenses are reinstated as soon as the person or business has paid their tax bill in full or come to an agreement with the IRS. At that time, no more collection activities can take place, and all tax liens are removed from the taxpayer’s property.

The IRS and the Washington State Department of Revenue can take away or suspend your professional license or driver’s license if you don’t pay tax. To prevent issues, set up a payment plan or make an offer in compromise. If you believe that there is a mistake, file an appeal. Get in touch with us at Seattle Legal Services, PLLC or give us a call at 206-895-7268 to book your tax consultation.