Notice of Levy
When a taxpayer fails to pay their federal taxes, the IRS has the authority to seize personal property and money from bank accounts. A levy is the last step in a series of collection attempts by the IRS to get you to pay your tax liability. When you fail to pay a tax bill, a Notice of Intent to Levy is sent to you. This notice is not something to be ignored. If you receive one of these notices, you need to find out what your options are and how to stop the levy from being finalized.
Basically, a tax levy is a way the IRS can get the money a taxpayer is unwilling to pay on their own. When you ignore all other collection attempts for your tax bill, you may receive this notice because you look unwilling to pay. Thus meaning you will have to turn over all listed assets, such as your home, cars and other personal property of significant value. It also means that the IRS has the right to withdraw all the money in your bank accounts and seize any future deposits made. In some cases, the IRS also has the authority to garnish your wages under the Notice of Levy.
If you receive this notice, the best way to stop it is by contacting the IRS. Together you need to come up with an agreement and set up a plan to pay off your tax bill. Filing for an IRS installment agreement or an offer in compromise will slow down the process of the levy, giving you time to pay the liability back. An installment agreement means you will make monthly payments for an agreed upon amount until the total tax bill is paid. Should you default on a single month, the IRS can go forward the levy process. If approved, an offer in compromise is a way to settle your tax liability for far less than you owe.
There are different types of notices the IRS may send you when they plan to apply a levy against your property. The Final Notice of Intent to Levy and Notice of Your Right to a Hearing is the most common one you will receive and are basically your final warning. There is also a Final Notice Before Levy on Social Security Benefits and is used when the IRS intends to go after the benefits you receive.
It may feel a bit overwhelming to receive a Notice of Levy. Mostly because this means your tax liability has gone unpaid and little has been done to attempt to pay or resolve it. Though this may feel like the end of the world, if you do not ignore this notice, there are still things you can do to stop the levy from being finalized. It is possible to recover from a final notice and get back on track with your taxes. Do not ignore the notice and contact the IRS to work out a plan or seek the assistance of a tax professional to help you through the process.
If you have any questions about your tax problems, feel free to contact us at 800-901-0885