If the IRS is ready to pounce on you, they've probably already sent a few warning signs well in advance. These usually come in the form of three certified letters. The first letter outlines what you owe and sets a due date. The second letter is harsher and tells you that they will take action if you do not pay. By the time you get the third letter, they've probably already pounced. A third letter will typically be accompanied by a tax lien, a bank levy, or in the worst-case scenario, wage garnishment.

Bank levies are one of the most powerful tools the IRS uses to collect tax debt. They can be devastating, making normal day-to-day living impossible. One moment your ATM card may be working fine, and the next minute it may stop working altogether.

Your taxes are due and you have no money to pay them. What should you do? No matter what, don't go into panic mode. There are some surprisingly simple solutions, the primary one being an Installment Agreement, which is a monthly payment plan that you setup with the IRS to pay off your debt.

The IRS uses tax liens (also known as tax levies) to seize money and assets. Tax liens can put your credit and your assets, including your home, at significant risk.

For some people, paying taxes in this kind of economic climate may be difficult. Some taxpayers are simply not able to pay off their debt in full because doing so would present a financial hardship. If you fall into this category and you need to settle tax debt, there are few options available to you.

What happens if your taxes are due and you don't have the money to pay them... or if you already have back taxes? Even if tax debt seems impossible to pay, do not despair. The following information may give you some peace of mind.