What is a tax levy?
In a nutshell, an IRS tax levy occurs when you fail to pay your taxes, or fail to make other arrangements to settle tax debt. In the event the IRS files a Federal tax levy to recoup your back taxes, the IRS may legally seize your real or personal property to convert to cash to cover your tax debt.
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Types of tax levies and tax levy garnishments:
The IRS will perform an assessment of your outstanding tax debt before issuing a Notice and Demand for Payment. Should you fail to acknowledge the notice and not pay the back taxes owed, an IRS tax levy may be initiated and you could face the following types of tax levy garnishment:
- Wage garnishment – This is the most common form of Federal tax levy garnishment. The IRS may instruct the debtor’s employer to initiate a tax levy on an employee’s paycheck, regularly deducting a pre-determined amount from the employee’s salary until the debt is satisfied.
- Bank account levy – The IRS may access, monitor and withdraw from your bank account as necessary until the tax debt is satisfied.
- Social Security garnishment or levy – The IRS may garnish up to 15% of the debtor’s Social Security income until the back-taxes debt is satisfied.
- Property seizure – This is the least common form of IRS tax levy and is typically treated as a last resort when dealing with uncooperative debtors.
Where to find IRS tax levy help:
When facing threats from the IRS and running the risk of living your personal financial nightmare, it is important to get IRS tax levy help, reliable information and the benefit of professional guidance before you take action. An IRS tax attorney can quickly analyze your case and recommend the best options for dealing with back-taxes and for releasing your IRS tax levy.
How to stop a tax levy:
If you have received formal notice from the IRS called a “Final Notice of Intent to Levy and Notice of Your Right to a Hearing,” it is in your best interest to investigate ways to stop the tax levy and protect your property and assets from seizure and garnishment. You have the right to appeal the IRS tax levy and may request a “Collection Due Process Hearing” with the IRS office identified in your notice. An appeal is one step, but the ultimate goal should be to release the tax levy. In order to release an IRS tax levy, you must:
- Repay the tax debt in full, or
- Prove financial hardship, or
- Prove the time for the IRS to legally collect the back taxes has expired
Because dealing with the IRS can be a complex and stressful process, it is really to your benefit to consult a tax lawyer for professional support to stop a tax levy and to act quickly to protect your assets and property from seizure.