A tax levy is a legal seizure of an asset to satisfy a back tax debt. This means that the IRS can take anything you have of financial value, such as your wages, the money in your bank account, or your home) in order to satisfy your tax debt. This is a final form of IRS action you will have had to either ignored your tax debt or refused to pay it before the IRS will take actions toward a tax levy. A tax levy is a nightmare for those who undergo it. It’s best to not ignore your tax issues to this point but, if you have, you can improve your circumstances by getting a better understanding of what a tax levy is and seeking help to end it.
If you have received a Final Notice of Intent to Levy, it’s important to know how this can affect you if you do not seek a resolution within the 30 day period you have to respond to the notice.
What can the IRS levy?
- Your bank balance: the IRS can go into your bank account and seize your funds
- Your personal property: the IRS can take a house, trailer home, boat, car, or almost any other physical item that the they deem financially worth seizing
- Your social security: the IRS can garnish from your social security payments
What can the IRS not levy?
- Unemployment benefits
- Workmen’s compensation
- Tools of the trade (things you need to work)
- Some public assistance payments
- Undelivered mail
- Some service-connected disability payments
Having a levy placed on your assets is one of the worst financial situations you can experience. If you have gotten a Final Notice of Intent to Levy, it’s best to deal with it immediately.
What are my options if I get a notice of tax levy?
- If you have the financial means, pay your debt in full to stop the levy
- You can enter into an installment agreement before the levy begins
- You can file an Offer In Compromise
If you have already experienced a levy, you still have options to resolve it. The IRS would rather resolve your tax debts in ways other than a levy and provides options to do so.
What are my options if I have a tax levy in place?
- If you can afford it, the simplest option is to pay your debt in full to end a levy
- You can enter into an installment agreement in which one of the terms of the agreement is an end of the levy
- You can prove that the levy creates an economic hardship
- You can negotiate a release with an IRS field agent
- You can show that the statute of limitations for your tax debt had expired before the IRS filed a tax levy, if this situation applies to you
A tax levy is one of the most stressful things a taxpayer can experience. If you are experiencing this, it’s important to seek help. There are options available to you. You should consult with a tax relief expert like those at Vanguard tax relief to help assess your options. A tax expert will know the relief strategy that is right for your circumstances and can help you work toward ending your tax debt in the most efficient way possible.