full screen background image

Tax Debt Pros

Tax Levies

Help with IRS tax liensAlthough the IRS is determined to get their money, they are often willing to work out a more reasonable solution with qualified South Jordan, UT tax professionals like us. We speak their language and know how to negotiate a settlement that satisfies them and allows you to pay the tax debt over time.

What is a Tax Levy?

A Tax Levy shouldn’t be taken lightly. It is the IRS's most lethal weapon it possesses and can be the most financially devastating. A tax levy is when the IRS will actually seize your assets to satisfy your back tax liability. A tax levy can cause you to lose your checking and savings account, investments, IRAs, accounts receivables, inheritances due to be received, social security, pension, insurance policies, or anything else that you own that carries equity.

When is a Tax Levy Filed?

It shouldn't be a surprise on you if the IRS imposes a levy. By the time the IRS starts to levy it is likely that you would have received many notices and demands from them. The IRS states that it will only levy after the following three requirements are met.

  • The IRS assessed a tax liability and sent you a notice and demand for payment
  • You neglected or refused to pay the tax amount that was assessed
  • The IRS sent you a final notice of intent to levy and notice of your right to a hearing at least 30 days before the levy.

The IRS will either send these notices to your last known address or give you the notice in person at home or at work. Once the final intent to levy has been received you can expect the IRS to begin to levy assets no sooner than 30 days from the date of receipt.

If you have ignored all prior notices, this is the one that you must not ignore because this is your last chance to take action and set up a payment plan, offer an offer in compromise or pay your tax debt owed to the IRS before you lose your assets.

Effects of an IRS Levy

Once the final notice of intent to levy has been received the IRS will begin to levy thirty days later. To begin the levy process the IRS will start sending out notices to third parties with whom they believe may be paying you. In these notices they will state that they must pay the IRS instead of you. These third parties will likely honor the request of the IRS because if they don't, the IRS will hold that third party responsible for the amount that they should have sent to the IRS instead of you. Below are three forms of levies the IRS uses to collect taxes.

Types of Tax Levies

Depending upon your financial and tax situation the IRS will make a determination of which form of levy to use. The most common form of levies are wage garnishment and bank account garnishment but will not rule out physical asset seizure if they don't feel they can recoup the unpaid taxes through wage or bank account garnishments.

Wage Garnishment

This is the most common form of IRS levy. Under this collection mechanism the IRS will contact your current employer and demand that they withhold a certain percentage of your pay in order to pay that amount towards the tax debt owed. This garnishment mechanism will remain in place until they have garnished enough wages to satisfy the tax amount owed, statute of limitations has expired, or the tax amount owed has been paid off or settled.

Bank Account Levy

With a bank levy, the IRS can access your bank accounts and monitor them and take money from them in order to satisfy tax debts owed. The IRS will continue to seize what money it can until they have collected enough money to cover the total amount of taxes owed.

Property Seizure

This is the least common levy method used by the IRS. This is typically the last resort the IRS uses with an uncooperative taxpayer. The IRS can take personal assets such as house, trailer home, boat, cars and just about anything else except for a short list of items they cannot legally take.

What to Do About an IRS Tax Levy

If you have received an IRS tax levy it is important to take the right actions if you want to stop the IRS. The IRS would rather resolve taxes in some other manner rather than a levy but they use a levy as a last resort collection method. Everyone's situation is different when it comes to their tax problems and is why not everyone should handle a levy in the same manner. It is important to make the right decision about resolving a tax levy based upon your unique financial and tax situation.

Releasing a Tax Levy

Assets that the IRS has already taken may be nearly impossible to get back, but once the levy is released the IRS will stop collection activities. There are many ways to release a tax levy, all the ways fall under two categories, either making good with the IRS or proving financial hardship.

Appeal the Tax Levy

If you don't agree with the IRS's choice to levy you have the legal right to appeal. There are many reasons a taxpayer can appeal a tax levy.

Do Nothing

Doing nothing is really only an option to people who know they will still have the means to survive while the IRS is levying their assets. If you do nothing, the IRS will continue to levy your assets until they have fulfilled your tax liability. Some people who find themselves in a situation where the IRS begins to levy their wages and find that they will be able to bear the inconvenience for a bit until the tax amount is paid back in full to the IRS. For many people, the reason why they cannot pay the IRS is because they simply cannot afford to pay them. Just cause you can't pay in full, doesn't mean you can't pay anything at all or settle to reduce the total amount owed.

Tax Levy Frequently Asked Questions (FAQs) >>