Tax Consultant. IRS Levy. IRS Lien. IRS wage garnishment. OIC

The assessment of tax is part of what we are told is the “assessed balance”. As we know, the IRS charges penalty and interest (P&I). Currently (and reviewed quarterly) the IRS interest rate for underpayments is 4%, compounded upon itself, accrued daily. That is not so bad, I wish that I had credit cards at 4%. The most common penalty is failure to pay. This is ½ of 1% per month, then 1% per month after Notice of Intent to Levy (between 6% to 12% annually). The penalty is only calculated on the unpaid tax, as of the end of the month. Combined, the P&I is between 10% to 16% annually.