The Financial and Personal Risks of Doing Nothing

When you receive a final notice from the IRS—such as a Notice of Intent to Levy or a Final Notice of Collection Due Process Hearing—the time for passive avoidance is over. The IRS has exhausted its warnings and is legally mandated to proceed with aggressive collection tactics. Ignoring this threat is the single most costly mistake a taxpayer can make, leading to severe, legally mandated financial consequences that escalate rapidly.

The Immediate Consequences of Ignoring the Final Notice

Ignoring the final notice does not make the tax debt disappear; it simply clears the path for the IRS to use its most powerful enforcement tools:

• Bank Levies: The IRS has the authority to issue a levy against your bank accounts. Once served, your financial institution is legally required to immediately seize the funds up to the amount of your tax debt and freeze them for 21 days. After this period, the funds are sent to the IRS. This action can immediately cripple a family’s cash flow, making it impossible to pay rent, utilities, or other essential bills.
• Wage Garnishment: The IRS can serve your employer with a Notice of Levy on Wages, Salary, and Other Income. Your employer is then required to withhold a large portion of your wages and send it directly to the IRS until the tax debt is fully satisfied. This forced reduction in your take-home pay is immediate and remains in effect until a formal resolution is established.
• Federal Tax Liens: If you do not pay or resolve the debt, the IRS will file a Notice of Federal Tax Lien, which is a public document recording the government’s legal claim against all your current and future property. This action severely damages your credit profile, making it extremely difficult to sell real estate, obtain a mortgage, or refinance existing assets. The lien stays on public record until the debt is paid in full or an agreement is in place, creating long-term financial difficulty.

The Financial Spiral: Penalties and Interest

In addition to seizure actions, the amount you owe increases exponentially every day you delay:

• Failure-to-Pay Penalty: The IRS assesses a Failure-to-Pay Penalty of 0.5% of the unpaid tax for each month or part of a month the debt remains unpaid, up to a maximum of 25% of the debt. If the tax remains unpaid 10 days after the IRS issues a Notice of Intent to Levy, that rate increases to 1% per month.
• Interest Accrual: Interest, which compounds daily, is charged not only on the unpaid tax but also on the accumulated penalties. The interest rate is tied to the federal short-term rate plus three percent and is adjusted quarterly. The longer you wait, the faster your manageable tax balance spirals into an unmanageable crisis.
• No Statute of Limitations Relief: The Collection Statute Expiration Date (CSED) is the ten-year deadline the IRS typically has to collect the tax. Ignoring notices does nothing to stop this clock. Furthermore, taking action, such as filing an Offer in Compromise or a Collection Due Process request, often legally suspends the CSED, effectively giving the IRS more time. The only way to address the CSED is through active, expert negotiation.

Consequences Unique to South Asian Residents

For South Asian individuals residing in the US, the consequences of tax delinquency can touch sensitive areas of personal and professional life:

• Travel Restrictions and Passport Denial: If your tax debt is classified as “seriously delinquent” (currently $62,000 or more, including penalties and interest, subject to annual inflation adjustments), the IRS is required to notify the State Department. This can lead to the denial of a new passport application or the revocation of your current US passport. For individuals who frequently travel to visit family overseas or maintain international business ties, this restriction can be devastating.
• Impact on Financial Reputation: The public nature of a Federal Tax Lien can impact your standing within community and business networks. Public record liens are easily viewed by potential lenders, partners, and even visa sponsors, creating difficulties in securing loans, business opportunities, and establishing long-term financial roots in the US.

How to Get the Stay: Oora’s Expert-Driven Approach

Obtaining a legal Stay of Enforcement is not a matter of simply requesting it; it is a procedural necessity that requires immediate, accurate financial disclosure and professional communication with the IRS. As soon as you engage Oora, our focus is to erect a shield between you and the IRS’s aggressive collection actions. We leverage our expertise to ensure the stay is granted quickly and effectively, providing you with the time you need to breathe and plan.

Step 1: Immediate Financial Disclosure

The cornerstone of any collection hold is proving that payment would cause financial hardship. This is not a subjective claim; it must be backed by rigorous financial documentation.

• Preparing Form 433: Oora immediately begins assisting you in preparing the detailed Collection Information Statement (Form 433-A or Form 433-F). This comprehensive form documents every detail of your current financial life: income, expenses, assets, and liabilities. This evidence is crucial to qualify for the highly effective Currently Not Collectible (CNC) status, which immediately halts most collection activity.
• Addressing Remittance: We recognize the unique structure of your finances, including vital foreign financial commitments. Oora’s expertise ensures that necessary foreign financial commitments, such as family support or remittance payments, are correctly classified as necessary living expenses. By accurately and justifiably demonstrating these obligations, we can build a strong case proving that your disposable income is insufficient to cover the tax debt, thereby justifying the financial hardship claim for the IRS. This transparency and accuracy are key to quickly securing the hold.

Step 2: Filing the Right Paperwork to Stop the Levy

The mechanism used to secure the stay depends entirely on the last notice you received. Oora’s licensed tax professionals quickly determine the fastest, most effective procedural route:

• CDP or CNC: If you have just received a Final Notice of Intent to Levy, Oora can immediately file a Collection Due Process (CDP) Hearing Request. This is a formal appeal that legally and automatically halts all enforcement actions while the appeal is pending—a critical, time-sensitive shield. Alternatively, if the levy notice is not imminent, we can aggressively pursue CNC status by submitting the completed Form 433 data directly to the IRS revenue officer assigned to your case, making the case for immediate hardship.
• Professional Communication: The success of securing a temporary hold often hinges on the credibility of the request. The stay is far more likely to be granted when communicated by a licensed representative (such as an Enrolled Agent, CPA, or Tax Attorney) who can demonstrate that a comprehensive, long-term resolution is being actively prepared. This professional engagement signals to the IRS that the case is being managed by an expert, justifying the temporary collection pause.

Step 3: Leveraging the Stay for a Permanent Resolution

A Stay of Enforcement is a necessary shield, but it is not a solution itself. It is merely a temporary pause. The clock is only halted until the IRS finishes reviewing the status or the CDP hearing is complete.

Oora’s strategy is to immediately use this valuable time to finalize and submit the long-term solution. While the stay is in effect, we dedicate resources to perfecting and filing your ultimate resolution proposal: whether it is a highly detailed Offer in Compromise (OIC), a request for Penalty Abatement, or a structured Installment Agreement. By the time the temporary stay concludes, the collection hold is transitioned into a permanent, manageable agreement, ensuring that you never face the immediate threat of levies or garnishments again.

Secure Your Peace of Mind and Stop Collections Today

You now understand the critical necessity of obtaining a Stay of Enforcement. When the IRS sends a notice, it is a formal declaration that the window for simple negotiation is closing. Ignoring the threat of a levy or garnishment is a gamble with your entire financial stability, often resulting in immediate asset seizure and the spiraling growth of your debt due to penalties and interest. Do not let fear or confusion lead to financial disaster. The immediate action you take now, backed by expert knowledge, is the only way to protect your assets and regain control.

Don’t Let the Clock Run Out: Act Now

The IRS operates on deadlines, and they will execute collection actions once those deadlines pass. They do not wait for you to find the perfect financial solution; they simply seize. To prevent severe consequences like bank levies and wage garnishments, you need a professional shield immediately. Oora is prepared to move instantly, filing the correct paperwork to secure your collection hold and put an end to the harassment. Take the first critical step toward your financial recovery today. Contact our licensed tax professionals for an immediate assessment and to halt the collection clock.