What is a Tax Levy?
A tax levy is when the IRS takes and sells your property or assets to satisfy your tax debt. It sounds similar to a tax lien, but a levy is the IRS harshly taking what’s owed. A tax lien is the IRS marking their territory, so to speak, a tax levy is the IRS taking it. Both are extremely forceful collection methods to secure the taxes owed. If you don’t act quickly, the government enacts their right to your assets and sell them. They will use that extra income towards paying your tax debt.
The only way for you to receive a tax levy is if you owe taxes, but are unresponsive to their notices, neglect your tax debt, or refuse to pay on time. The IRS is required to send you notices of intent before they commit to a levy, but they do not need to go to court to begin seizing your assets and property.
Types of Tax Levies
One of the more common IRS seizes. The IRS tells your employer to send part of your paycheck to them to pay off the tax liability. While this sounds like a simple solution to paying your owed taxes, the IRS doesn’t always consider what other bills you have to pay, taking way more money from your paycheck than you can possibly afford.
Property includes your car, boat, or house. Anything that you actively own, the IRS will take from you to pay towards your tax debt.
Any tax refund you receive from your state or federal tax return is automatically transferred to the IRS.
Selling Your Property Because of a Tax Levy
A tax levy directly negatively affects your life. The IRS may give you a written warning, but you generally have 21 days until the IRS decides that a levy is necessary to receive what’s owed. A property seizure is a forceful method of sale. The IRS tells you that they are taking your home through certified mail and sends sell notices to newspapers and flyers. After the IRS sells your property, they use that income to pay for the levy, the sale of the home, and any remaining goes towards your tax debt. If there is income left over, mortgage lenders receive priority over the remaining amount.
Thankfully, there is a solution to fighting the IRS back before they debilitate your livelihood and sell everything you own. A tax professional will view your tax history, your current income, and plan what they can do to make your life easier. The IRS will do anything to take your money to satisfy a debt. A tax professional pulls them back and gives you a reason to relax during this stressful time. They can also check to see what other programs you may qualify for.
Tax Levy and Financial Hardship
A tax levy is extremely aggressive and unless you dispute the levy, the IRS will likely not consider how the levy affects your state of living. From wage garnishments to property seizures, the IRS wants your debt paid through any means necessary.
If you struggle paying for basic needs because of the levy, the IRS is legally obligated to release your levy to prevent economic hardship.
The catch is that you need to prove you’re struggling by submitting all the necessary paperwork and going through several calls with the IRS. You need to move quickly and efficiently so that the IRS doesn’t take any more than they should. A tax professional takes your obligations off your hands and does the work for you. Proving financial hardship is extraordinarily tedious, but with a tax pro, it’ll be far easier than doing it on your own.
Prevent A Tax Levy
The best way to prevent a tax levy is to file and pay your taxes on time. As long as you remain compliant with the IRS, you can avoid any tax collections from them. Never ignore their letters or your tax levy will only get worse.
Ways to Release a Tax Levy
The best way to remove a tax levy is to speak with a tax expert about your taxes. You have a limited time to communicate to the IRS. You have 30 days from when you receive the Notice of Intent to Levy to dispute or communicate to the IRS. That isn’t a lot of time for you to gather your required papers, fill out the correct forms, and be on hold with the IRS while also working, taking care of your children, and so forth. It is highly recommended to rely on a tax relief firm to resolve your tax situation.
A tax professional has complete knowledge of the IRS’s aggressive collection practices. They will walk you through on how to best negotiate with them to avoid breaking your bank. They dedicate their working hours to resolving tax cases every single day. A tax pro can find what Fresh Start Tax Relief Program you qualify for to reduce what you owe or get rid of the tax debt completely!
It’s the one way to guarantee you’ll be free from the IRS’s letters and levies, but this isn’t always feasible for thousands of taxpayers.
Prove financial hardship due to the levy and the IRS will have to release your levy.
An installment agreement is one of the most common ways for taxpayers to pay the IRS when they file on their own. There are other ways to negotiate with the IRS.
An offer in compromise actually reduces your tax liability. In many cases, it can reduce your tax debt up to 90%. A tax professional greatly increases your chances of receiving an OIC.
You and your tax professional can file for a tax levy appeal to dispute your tax levy. This will likely require a sit down meeting with an IRS employee, but with a tax professional by your side, they can negotiate for you.
Speak with America’s Choice Tax Professionals
America’s Choice Tax is a nationally recognized tax relief company that puts you first.
We’ll examine your tax history and determine the best course of action for your tax levy. Tax levies are complex and you must act fast to negotiate with the IRS. The IRS will do whatever it takes to get your money. America’s Choice Tax considers your life when negotiating with them and acts in your best interest. Contact us today for a free consultation and get a fresh start on your taxes!