What is a Tax Levy?

FYI, an article from L Reams EA

A tax levy is a legal seizure of your property, whether it's cash or virtually anything else, in order to satisfy a tax debt. Levies are often confused with tax liens, which is simply a legal claim that made by the government that goes on your credit report to ensure that it gets priority over other creditors. However, a levy is when your assets actually get seized in order to pay off your past-due tax bills.

How Long Would My Tax Bills Have to Go Unpaid Before I Get a Tax Levy?

State governments may have different conditions to be met in order for them to legally seize your property. Their guidelines for the tax lien process and levying your property may be similar to the IRS, or more or less liberal so you should check your state's tax department to learn more. There is no set amount of days or months that your tax bills would go unpaid, but for IRS levies you would have to have a past-due account for quite a while. This is because the IRS must follow a due process when it comes to collections thanks to both the  Internal Revenue Service Restructuring and Reform Act of 1998 as well as the Fresh Start Initiative of the early 2010s. Depending on the size of your unpaid tax bill, the IRS may not prioritize its limited resources to trying to collect on your account so it could take months before you receive any notices. Therefore, it would take a significantly long time before the levy process would begin.

Officially, you won't get a tax levy from the IRS until the following conditions have been met:

• The IRS sent you an actual tax bill for your unpaid taxes, a Notice, and Demand in writing.
• You subsequently didn't pay any tax owed, either willfully or because you couldn't afford to pay anything.
• The IRS sent you two final notices upon nonpayment of your tax bill: a  Notice of Your Right to a Hearing 30 days prior to them putting a levy on your bank account or other assets, then a Final Notice of Intent to Levy. Virtually all IRS correspondence is in writing but what makes levy notices unique is that if these notices are mailed, you will get them by certified or registered mail with a return receipt requested. You may also be served with these notices in person at home or work.

Issuance and Enforcement of an IRS Tax Levy

First, the conditions outlined above must be satisfied in order for the IRS to legally levy your property. The IRS will decide that a levy is the appropriate course of action if you haven't responded to their requests and didn't make any arrangements to shift your account to "currently uncollectible", go on a tax payment plan, or settle the debt with an offer in compromise.

Enforcement actions include garnishing your wages, seizing your bank account and other financial assets such as cash surrender value of life insurance policies, retirement accounts, and brokerage accounts. Tangible assets like cars and boats can also be used to satisfy tax levies, and if the levy is sizable and/or unsatisfied after going through your financial assets and vehicles, the IRS is likely to go after the deed to your home and any rental property you own.

Property that you own or have an interest in is the property the IRS will levy. Even if someone else holds that property, such as a joint bank account held with your spouse, it is at risk for being levied.

How to Prevent a Tax Levy

Here's how you can prevent the situations that would cause you to wind up with a tax levy, to begin with.

Contact the IRS if you literally can't pay your federal taxes. You can make arrangements for a payment plan such as an installment plan, or request that they shift your account status to uncollectible if you can prove financial hardship. If you owe an onerous amount of taxes, you also have the option to settle them for a lower amount with an offer in compromise.

Even if your state tax department doesn't offer the same options for state taxes you owe, it's best to notify them and see if they will grant you a hardship waiver. State tax departments also usually have their own payment plans.

It's best to mitigate the situation as soon as you're aware. Levies can be easily prevented with the right steps.

If you need assistance with your IRS TAX PROBLEMS, contact us (EA TAXES)asap for an appointment and or free initial consultation. We offer Remote Services at reasonable prices. Ph 305.238-2252 Fax 888.603.0045 https://www.EAtaxes.net [email protected]