The IRS public relations people like to point out that our federal income tax is founded on the voluntary cooperation of citizens and is somewhat of an honor system. Unfortunately, if you end up owing back taxes you will quickly discover that the IRS definitely has the system covered. Your own cooperation won't necessarily be voluntary if come up against an IRS tax levy.
Liens and levies are IRS collection weapons
If you fail to pay your taxes the IRS can attach or take your assets. Attachments are in the form of a lien. Generally, a tax lien is a legal claim the IRS puts on your business or real property, which cannot be transferred or sold until the lien is satisfied. A levy on the other hand, is the actual seizure and subsequent sale of your real or personal property that you own in full or in which you have an interest.
Everything you have is vulnerable to a levy
The IRS could for example:
- Take anything you hold -- a car, boat or even your house -- and sell it off to settle your tax debt.
- Go after property that is yours, but is controlled by someone else. That would include your paycheck, commissions, a retirement account, stock dividends, money in your bank account and other sources of income -- even the money loan value of your life insurance policies
If you are facing a lien, you have already received notice
The IRS levy process has to meet the following criteria:
- They audited your tax return and sent you a Notice and Demand for Payment.
- You failed to pay the tax .
- You received a Final Notice of Intent to Levy and Notice of Your Right to a Hearing 30 days before the levy.
Your final notice may have arrived by certified or registered mail or personally delivered to your last known address or place of business.
Hardship cases
Having a levy on your paycheck, bank account or other property could definitely cripple you financially, but if you act quickly and contact the IRS at the phone number on your levy notice, you might be able to get a temporary release of the levy. From this point in the process you need to work closely and cooperatively with the IRS to get things settled.
Time to get some professional tax help
At this point everything may seem somewhat overwhelming. Why do you owe that extra tax? Was there something you didn’t get a chance to-- or didn’t know how to -- dispute the tax liability? Do you really want to face the rest of the process knowing what a tremendous hammer the IRS wields, especially when there’s an inherent conflict of interest between the IRS employee’s desire to help you and the IRS’s position as the world’s most powerful collection agency?
Optima Tax Relief can help
Your first step is to use the 30-day grace period mentioned above to get a release from the IRS levy. Then you can explore your options for resolving all the issues that caused the levy and come to a settlement. That’s where we come in. Visit our web page and see if you qualify for a free estimate, and a no obligation professional tax evaluation from one of our senior tax professionals.
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