When the IRS Means Business with Tax Levy Notification
If you have received IRS notification regarding a tax levy, it is important to take immediate action. Wiggam Law tax attorneys can assist you in resolving the tax debt.
What Is a Tax Levy?
A levy is a collections process used by the IRS to resolve tax debt. When a levy is issued, the IRS may seize any of the following as payment:
- Property Such as Real Estate, Vehicles, or Boats
- Wages
- Bank Accounts
- Retirement Income
- Social Security Benefits
- Future Federal or State Tax Refunds
One-Time vs. Continuous Levy
Depending on the amount owed, the IRS may issue a continuous levy or a one-time levy to pay the tax bill.
A one-time levy is most often a bank levy, which allows the IRS to freeze the balance in your bank account at the time the levy order is processed by the bank.
The most common type of a continuous levy is wage garnishment. The IRS can continue to subtract money from every paycheck until your tax bill is paid. However, the IRS must follow a very specific timeline when garnishing wages so in almost all cases, you will receive notice 30 days before the garnishment starts.
What Happens When You Get a Tax Levy?
The IRS is required to contact you several times to give you the opportunity to pay their tax bill, or contact the IRS to develop a payment plan if unable to pay the tax bill. For instance, if you owe individual taxes, the agency may send CP504, and for business taxes, they may send CP504B, but there are lots of other notices that go out as well.
After the IRS has sent a number of notifications without a response from you, they send the Final Notice of Intent to Levy. This allows them to levy other assets if no action is taken by you within 30 days.
At this point, you must take action to file for a Request Collection Due Process Hearing. If filed within 30 days of receiving the Final Notice of Intent to Levy, the IRS may not issue any levies.
If you wait until after the 30 days, the Wiggam Law tax professionals have a number of other strategies to help you avoid a levy.
Levy vs. Lien
According to the IRS, “A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a legal claim against property to secure payment of the tax debt, while a levy actually takes the property to satisfy the tax debt.”
Wiggam Law tax attorneys are equipped to help guide you through both lien and levy situations.
How to Release a Tax Levy?
The best way to address a levy is to directly communicate with the IRS. The tax professionals at Wiggam Law will represent and guide you through the entire tax levy process until there is a solution, including the levy release.
There are multiple ways to have the IRS release a levy:
- Pay the Tax Bill in Full and Stay Current With Tax Filings
- Set Up a Payment Plan With the IRS to Pay Off the Tax Bill
- Negotiate Currently Not Collectible Status with the IRS
- Submit an Offer in Compromise
- File a Request for Innocent Spouse Relief
Wiggam Law tax attorneys have the knowledge and expertise to handle all tax bills and levy cases.
What should I do if I receive a Final Notice of Intent to Levy from the IRS?
If you receive this notice, it’s crucial to take immediate action. You have 30 days to file for a Collection Due Process Hearing, which can prevent the IRS from moving forward with the levy. Contacting a tax attorney as soon as possible is important to avoid asset seizure.
Can the IRS take money from my bank account?
Yes, the IRS can issue a bank levy, which allows them to freeze the funds in your account and seize the money to pay your tax debt. This is typically a one-time levy, and you may not be able to access the account while the funds are held.
What is a continuous tax levy?
A continuous levy, such as wage garnishment, allows the IRS to take a portion of each paycheck or other regular income until the full tax debt is satisfied. This continues until the debt is resolved or the levy is lifted.
How can I stop a tax levy?
You can stop or release a levy by paying the full tax bill, negotiating a payment plan with the IRS, proving financial hardship to get “Currently Not Collectible” status, or submitting an Offer in Compromise to settle for less than the full amount owed.
Can I negotiate with the IRS to avoid a tax levy?
Yes, you can negotiate with the IRS to avoid or lift a levy. Options include setting up an installment agreement, filing for innocent spouse relief, or submitting an Offer in Compromise. A tax attorney can help you find the right solution for your unique case.
Can I appeal a tax levy?
Yes, you can appeal a tax levy by requesting a Collection Due Process Hearing within 30 days of receiving the Final Notice of Intent to Levy. An experienced tax attorney can help guide you through the appeals process.
Contact Our Attorneys in Atlanta, GA
If you do not have the means to pay any portion of your tax bill while also meeting your living expenses, a tax attorney can help you review your options for tax levies.
At Wiggam Law, our team of experienced tax lawyers can help you evaluate all your choices and represent you. Give us a call today at (404) 233-9800 to get started.