IRS and Tax Levy Service

An IRS Tax Levy allows the Service to legally take your assets to pay off your past duefederal tax liability. A levy can also be imposed by state government units in which you owe a tax debt to. Methods in which an IRS Tax Levy will occur can be garnishing your wages. Second, the IRS can Levy money directly out of your bank accounts. The most severe levy action would beseizing your property such as real estate, vehicles or other personal property to sell and fulfill thetaxes owed.
IRS Tax Levy
IRS Tax Levy

An IRS Tax levy will occur after a Federal Tax Lien has been filed.

An IRS Tax levy will occur after a Federal Tax Lien has been filed. The Federal Tax lien secures the interest of the IRS withrights to your property and assets. The IRS Tax Levy permits the actions of using that right to securethe funds through a sale of the assets with a lien. Prior to the levy being imposed you must be made aware with an IRS notice, CP 504, which is a final notice of intent to levy.When this notice is supplied it will be sent by certified mail, directly to your last known home address.

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

An IRS Tax Levy can affect your life in many ways. The most common way that a Tax Levy is imposed would be through wage garnishment. This means that a request is sent to your employer to withhold a fraction of your hard-earned money each pay period. Do not let your tax problems get to the point where you are forced to pay. It is easier to be proactive and make sure that a Tax levy does not occur. Once a levy is in place it is more work to undo something that could have been avoided in the first place.
IRS Tax Levy

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.

IRS Tax Levy
IRS Tax Levy

How To Save Yourself From an IRS Tax Levy

The general rule to avoid an IRS Tax Levy would be to pay the tax that is due in a timely manner. We know that this may sound easier than it really is. When faced with a large tax bill at the end of the year, funds may just simply not be on hand to pay it. There are steps that can be taken in advance to ensure that an IRS Tax Levy will not happen. Having proper withholding out of your paycheck, making the required estimated tax deposits or paying balances in full at the time of filing can increase the chance of escaping an IRS Tax Levy. Sometimes people make mistakes and we understand. When this happens, you should contact a tax attorney, enrolled agent or other tax expert to help you get the levy released.

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 negotiate an IRS Tax levy being released. It may be too late.

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