Tax Consultant. IRS Levy. IRS Lien. Offer in Compromise. Garnish
Looking back to our $10,000 tax assessment, the interest is 4% or $1.10/day and the penalty is $50/month. If it logically takes the IRS computer time to process and mail out a bill, easily fifty days has passed. Let’s not forget the failure to estimate penalty (call it $820 for this example). The first bill the taxpayer gets is $10,929.56. This first bill, first combined assessment, is forever ingrained in the IRS’s computer as the “assessed balance”. This is an important Collections concept as a huge part of the Collection Process revolves around the assessed balance. We will come back to this several times. The assessed balance is comprised of the assessed tax ($10,000), the assessed penalty ($870) and assessed interest ($59.56). This is not to be to confused with the unpaid balance assessed, which is comprised of tax assessed, interest assessed, penalty assessed minus any payments or credits on the account.