When a Taxpayer owes income taxes to the federal government, the IRS does not immediately levy the taxpayer and take everything that they own. The IRS will typically send the taxpayer a number of notices. If the taxpayer doesn’t respond, the IRS may send a “Notice of Intent To Levy”. This notice will give the taxpayer 30 days to resolve the outstanding debt, or to request a Collection Due Process Hearing. Only after that 30 days passes can the IRS levy the taxpayer.
What Can and Can’t the IRS Levy, Seize, or Garnish?
It’s much easier to identify what the IRS can’t levy or seize since any asset, not specifically excluded by law, can be levied by the government. The IRS can and often does levy bank accounts and garnish wages and a portion of Social Security payments. They can also seize a taxpayer home, retirement assets, and/or other assets of the taxpayer but are less likely to do so. However, there are some assets that the IRS can’t levy`. Under Section 6334 of the Internal Revenue Code, the following assets are free of threat of levy of the IRS.
- Unemployment Benefits
- Worker’s Compensation
- Child Support Income
- A portion of wages are excludable, and
- Undelivered Mail
A Taxpayer does have options to stop and/or delay an IRS Levy. We’ve covered some of these options in the past and will do so again over the next few weeks, and they include the timely request of a CDP hearing, filing an Offer in Compromise, setting up a payment plan, being categorized as Currently Uncollectible and Bankruptcy in certain cases.
Do you Need Help?
If you are under a threat of an IRS Levy or have any other IRS issues and need professional help in resolving your problem, please contact me at (972) 821-1991 or at [email protected].