What Are the IRS or State Tax Levies?
Tax debts are among the most difficult debts to eliminate, not even avoidable by filing bankruptcy. This is because the IRS has more power than other types of creditors to seize your assets. In this way, the IRS can use a tax levy to seize property without even having to take you to court for a winning judgment which is not the case with a bank or credit card company. The good news is that it’s possible to prevent a levy from happening or one that’s in progress. Let Success Tax Relief explain this system to you.
What is a Tax Levy?
Tax liens and tax levies are ways the Internal Revenue Service’s tax debt collection enforcement happens. It is the common method the IRS uses to get money owed by a taxpayer who doesn’t pay the levy on time.
Tax levies can be collected in several different ways. Here are some of the most common:
- Bank levies: The IRS can require your bank to prevent withdrawals from your account for 21 days and then withdraw funds from your bank accounts. The bank must then forward the money you owe to the IRS.
- Wage garnishment: Your employer will be forced to hold back a portion of your pay to send to the IRS until your debt is paid.
- Property seizure: The IRS can take the property you own (such as a house or automobile), sell it, and apply the sales proceeds to your tax debt.
- Reduced tax refunds: The IRS may hold money that would otherwise come to you via a refund by completely redirecting refunds from the state to the IRS instead of to you.
- Miscellaneous: Surprising ways such as tax liability, social security, or federal taxes are another way the IRS will make sure your tax bill is paid.
When Will the IRS Levy Your Assets?
The IRS will start to levy your assets after a final notice of intent to do so when they have made attempts to offer a payment plan, booking services, or offer in compromise. In particular, the IRS will only begin to collect taxes owed if the following things have already happened.
- The IRS sent you a notice demanding payment.
- You ignored the notice or failed to make a payment.
- The IRS gave you 30 days to appeal or respond to their intent to levy.
After 30 days, the IRS can start to take your assets. To avoid that, you need to contact the IRS to appeal or have a tax professional do it for you. A licensed tax professional with experience in tax resolution can analyze your financial and tax situation to pursue the best IRS options on your behalf. Contact Success Tax Relief for help with your levy and notice.
How Can You Stop a Tax Levy?
If you are receiving notices from the IRS, you want your levy released. A tax professional can help you get back into good standing with the IRS or State. Usually, a taxpayer needs to get into filing compliance to set up a resolution with the IRS or State. Once the IRS seizes assets, it is difficult to get them back. Therefore, it is very important to take action quickly. With a tax levy, we highly recommended leveraging a licensed tax professional. Don’t delay and contact Success Tax Relief for help with your levy and notice.