Levies and liens are two of the tools that the IRS uses to collect debts owed by taxpayers. Both can adversely impact the taxpayer, but there are procedures by which both can be released or removed.
A tax levy, as defined by the IRS, is the legal seizure of your property in order to satisfy a tax debt. Some property that can be seized by the IRS and sold to pay off the debt is your home, car or boat. The IRS can also levy wages, retirement accounts, rental income, and even the cash loan value of your life insurance.
If the IRS issues a notice to you that it intends to seize your assets, you have 30 days to challenge the levy or to attempt a resolution through a payment plan or by paying the amount you owe in full. If you need additional time to consider your options or to arrange payment, you can file for a stay of collections that will allow you an additional 90 days.
The IRS may also opt to release a levy if it determines that the levy would create an immediate economic hardship. While this release doesn't mean you don't have to pay the money, it does allow for you to work toward a resolution with the IRS.
A tax lien gives the government a legal claim to your property. Unlike a levy, the lien doesn't grant possession of your assets, but merely grants the rights to receive any income you receive from the selling of those assets in order to satisfy your debt. Having a lien placed on your property is harmful to your credit and may make it difficult for you to do business or to sell your assets.
A new tax policy allows for the process of "withdrawal" from a lien when the debt is paid in full or the taxpayer has enrolled in a payment plan that -- once completed -- will result in the debt being paid. Withdrawal of the lien causes the bad information to come off the taxpayer's credit report faster than any other detrimental issue. It is important to note, however, that the withdrawal process only applies to federal tax liens. State-level liens will remain as negative information on your credit report.
You may also have the opportunity to have the tax lien removed if you can prove in court that the tax has already been paid, the IRS failed to followed proper procedures, you were in bankruptcy when the lien was filed or the statute of limitations on collecting the debt has already passed.
If you have received a notice of the government's intent to file a levy or a tax lien, it is important to act right away in order to avoid the consequences of these actions. Optima Tax Relief has experience working with the IRS and can help you find relief from a tax debt by negotiating a solution for you. For a free consultation and to learn more about your options for resolving your tax debt, contact us.
Devin Finley is a freelance writer and tax relief expert. Devin writes on a multitude of financial and legal topics. He enjoys collaborating and strategizing with other professionals to ensure tax & debt clients receive competent and beneficial representation. For more information Visit http://optimataxrelief.com/
No comments:
Post a Comment