IRS and Tax Levy Service
An IRS Tax levy will occur after a Federal Tax Lien has been filed.
A balance will be listed on the notice and you must pay it by the date listed. Generally, they allow a window of about 30 days for your response or payment of the taxes owed.If a response to the notice is not made timely, the IRS will move forward with collection actions. The IRS is looking to secure funds in the amount of the tax bill by keeping your state income tax refund or usingother methods such as wage garnishment or a bank levy.
How A Tax Levy Can Affect Your Life
The Most Common Tax Levy method the IRS uses is to freeze your bank accounts
When this happens, the IRS will contact your bank directly and send out a 21-day hold of all the funds in your account. Within the 21-day time period you have the chance to resolve your account with the IRS and have the funds released. Ways to resolve your account would be to establish a payment plan, submit an offer in compromise or full pay the balance owed. If there is no type of resolution made within that time period, the bank will be forced to send some, or all of your funds being held directly to the IRS.
How Your Property Can Be Seized by the IRS In a Tax Levy
The most severe method of an IRS Tax Levy would be to seize your property. The IRS will attempt to seize any asset that is not used for basic living and shelter. These assets would include second homes, vacation properties, boats, cars, RVs, motorcycles or valuable items such as jewelry or heirlooms that hold value. Although this is one of the most extreme methods, it is not exempt from a way for the IRS to secure their funds. There are some items that are excused from being seized. Some of these items are disability payments, public assistance or child support, unemployment benefits, specific pension and annuity benefits, furniture or other personal property items. This is not a full list of the exempt items but rather the more common items that are left out.
How To Save Yourself From an IRS Tax Levy
The process can be very lengthy and detailed. It is best to have an expert on your side that can make sure your money and assets are safe. If you are able to set up an Installment Agreement over the phone with the IRS, you can ask for the levy to be released. Not all payment plans are affordable, and some may take additional documents to show what your ability to pay is. Do not wait until the last minute to attempt to deal with an IRS Tax levy being released. It may be too late.