What is a Tax Warrant? Definition, Overview, and how it works

You don’t want to postpone filing your tax return or cannot pay your taxes entirely if you get into problems. The government can seize your assets if you don’t strive to make good on your income tax debt (offer a tax warrant). 

In the most serious cases, you may be sentenced to prison. It can incur penalties and interest costs in a variety of situations. 

The two most common are failing to file your tax return on time and failing to pay your taxes on time. 

In this article, we will focus on when the government offers a tax warrant; what it implies and what you can do.

What is a Tax Warrant?

A tax warrant is a legal action that the state or federal government can take against you if you don’t pay your taxes. The warrant, a lien, is a public document that empowers the government to seize your personal property or assets to collect unpaid taxes.

Here’s what you need to know if you owe money to the IRS and have been served with a tax warrant. 

How does a Tax Warrant Works?

When you submit your taxes, you’ll receive a Notice and Demand for Payment, sometimes known as a bill, from the Internal Revenue Service. 

If you do not prepare to pay the past-due tax amount in full or through an installment plan, the IRS will try to collect the back taxes in other ways. A tax warrant is normally issued at the end of the IRS collection process. 

It usually happens in this sequence: if you don’t pay your first tax bill, you’ll be hit with at least one more; if you disregard the second bill, it will take legal action against you. 

After then, if you get a tax refund in the future, it will be credited to your back taxes until they are paid in full.

A tax warrant is a public document associated with all your current and future assets. While the warrant is in place, you won’t be able to sell or refinance these assets. 

Your property may be confiscated to satisfy the obligation if you do not settle your unpaid taxes with the IRS. 

Your apartment, automobile, and/or savings and retirement funds may all be included. Your credit score will be lowered if you have a warrant on your record. 

This can make getting a mortgage, vehicle loan, or credit card difficult. When creditors learn that you owe any money to the IRS and are unable to pay it, they will be skeptical of your capacity to repay a new loan.

If you disagree with the amount of tax that has been assessed, you can contact your local IRS office right away. 

Collections action will be postponed until your appeal is processed. If you are currently filing for bankruptcy, contact the IRS right soon. 

Although your debt will not be discharged, the bankruptcy court will consider it. During the bankruptcy process, collection actions will be halted as well.

Effects of a Tax Warrant

#1 Your creditworthiness may suffer.

Although tax warrants are no longer reported on credit reports, the IRS can still file a public notice of the tax warrant, informing creditors that the government has a claim to your property. According to authorities, this could compromise your ability to get a loan.

#2. It can put a home sale or refinance in jeopardy.

During title searches, tax warrants are frequently discovered. If you have equity in a home that you want to sell or refinance, you’ll almost certainly have to spend some of it to pay your taxes before closing.

#3. It can take up a lot of your time.

Many delinquent taxpayers are routed through the IRS’s automated collection system, or ACS, which can cause hours spent on hold with the contact center. Also, some taxpayers may be assigned to a revenue officer, which could cause in-person visits.

#4. I may hit you with a tax levy.

The IRS may issue a Notice of Intent to Levy if you do not pay your unpaid taxes after the IRS filed a federal tax warrant.

How to Get Rid of a Tax Warrant

Paying the taxes owed is the simplest approach to removing a federal tax warrant. If this is not practicable, there are additional options for dealing with a warrant with the IRS’s cooperation.
If the taxpayer agrees to a payment plan that includes a monthly automatic withdrawal until the debt is paid off, the IRS may consider dismissing the tax warrant. 

A debtor may unload a specific property from the warrant, essentially erasing it. The discharge is not available to all taxpayers or properties. The regulations for discharging property are detailed in IRS Publication 783.

Subordination does not eliminate the warrant from the property, but it can make it easier for the taxpayer to get a new mortgage or loan. 

To request such action, you can fill out IRS Form 14134. Another procedure, known as withdrawal of notice, removes a federal tax warrant’s public notice. 

The taxpayer remains accountable for the debt, but the IRS no longer competes with other creditors for the debtor’s assets. 

The application is Form 12277. If paying the taxes is just impossible, the taxpayer should pay as much as workable and seek bankruptcy court discharge of the remainder. 

Don’t let your taxes hit you unprepared. Check out: What is Tax Planning? Why do You Need

If the taxes are not paid, the tax authorities can utilize a tax levy to lawfully confiscate the taxpayer’s assets to recover the money owed. 

A levy allows the government to confiscate and sell the property to satisfy the tax debt, but a warrant secures the government’s interest or claims in the property.

To repay your outstanding back taxes, the IRS can seize assets under a tax warrant by taking control of and selling real estate, withdrawing funds from bank accounts, or topping up your earnings. 

The provisions of an IRS levy are legally binding on banks and employers. You will get paperwork labeled Final Notice of Intent to Levy and Notice of Your Right to a Hearing when your account reaches this stage in the collection process. 

Speaking with a knowledgeable tax lawyer who can represent you in front of the IRS is critical.

What Can I Do When I Can’t Pay My Taxes?

#1. Set up a Payment Plan: 

You can set up a payment plan if you cannot pay the full amount due. If you are making a good faith attempt to pay as agreed in installments, you will not be subject to IRS collection procedures. You can apply for a payment plan by filling out an online application.

#2. Offer in Compromise: 

An offer in compromise is another possibility, in which the IRS offers to pay your unpaid taxes for a lower amount than you owe. 

This is a rare alternative, but it may be available if you can demonstrate that you do not have the assets or income to pay the back taxes and that paying the entire amount would cause undue financial hardship. 

You can also ask the IRS to mark your account as non-collectible (CNC). This indicates that you currently cannot make any payments. 

However, this does not guarantee that you will not be served with a tax warrant. You also may ask the IRS Appeals Board for a collection due process hearing. This is especially critical if you’ve been served a warrant or levy notice.

#3. Turn to Your Credit Card:

You can load your tax obligation to your credit card for a convenience fee of roughly 2% through a bank or credit union debt consolidation loan. 

You might think your credit card helps you spend, but that’s not true. Check out: How Your Credit Card Can Help You Save Money

But, you will have made good with the government if you choose one of these choices, but you will be moving your debt to a more expensive source. 

You may worsen your long-term situation unless you have a credit card with a low annual percentage rate (APR) or can gain a personal loan with a low-interest rate.

#4. File for payment extension:

You can file Form 1127 to get a six-month payment extension if you believe you have a valid case because of excessive hardship. 

You’ll also need to provide a statement of all your current assets and liabilities and a detailed account of all the funds you’ve earned and spent in the previous 3 months, together with this form. 

Payment extensions are rarely allowed by the IRS and will only be allowed if you can show that you are experiencing undue hardship. 

You won’t be eligible for a hardship extension if you purchased a 60″ flat-screen TV last month when you had no clue you’d owe $5,000 in taxes.


Tax warrants must be avoided at all costs because of the many inconveniences and limitations they bring. When they are incurred, however, they can be released by paying up the debts install mentally or in worse cases, when you declare bankruptcy.



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