The IRS is certainly amongst the most powerful creditors in the world. They have several tools at their disposal to collect delinquent taxes. The tool that gets the quickest attention of a taxpayer who owes taxes is the Levy. When taxpayers with an IRS levy come to our Richardson TX office, they are often incredibly stressed and want to immediately deal with their tax issue.
What is an IRS Tax Levy?
An IRS levy permits the IRS to legally seize the taxpayer’s property, including garnishing wages, taking money from bank accounts or other financial accounts, as well as seizing real estate, vehicles and other personal property to satisfy a tax debt.
When does the IRS Levy a Taxpayer?
The IRS doesn’t immediately Levy a Taxpayer who owes taxes. There is a process with delinquent tax debt that leads to a levy including the following steps:
- The tax return is filed and the tax is assessed.
- An initial notice goes out notifying the taxpayer of the tax owed.
- Several Additional notices are sent to the taxpayer. If the taxpayer pays attention, the notices get increasingly more direct.
- Eventually, the IRS sends the Taxpayer a Final Notice of Intent to Levy. This is often IRS Letter 1058 or LT11 and gives the taxpayer 30 days to respond. If the deadline is missed, the IRS can now levy the Taxpayer.
How Can a Taxpayer Stop or remove a Levy?
The key to a Taxpayer stopping or avoiding a levy is to respond to the IRS and attempt to resolve the issue. The Taxpayer can:
- Enter into a payment plan to pay down their debt.
- File an Offer-In-Compromise where the IRS agrees a settlement for less than the full debt amount.
- Being categorized as Currently Not Collectible.
- Eliminating the Debt as part of Bankruptcy if it qualifies.
The best solution for the Taxpayer will be based on their own unique Circumstances.
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