Tax Levy, the IRS and You
Posted by | Posted in Trading Software | Posted on 20-05-2012
A tax levy can come from any form and level of government which has the authority to impose a tax, whether it is city, county, state or federal government but the most feared of these is the IRS tax levy. It carries the most weight and provides the government with the most power to pursue the collection of the tax debt. In most areas a tax levy may only be focused on the particular property or item being taxed but with a levy from the IRS you can be facing forfeiture of all your property, business and personal assets as well as facing federal prison time. This is scary stuff to the average taxpayer and being prepared for what is coming will help to alleviate many of these fears.
If you have been notified of delinquent taxes and still have refused or been unable to pay them, a tax lien will be placed against your property first. The IRS will then put a tax lien on your property and once this is done they will initiate steps to seize any and all property and assets that you own in order to satisfy the debt. The most common form of tax levy is the IRS Garnishment of your wages. In this instance your employer will receive a notice to withhold any payment due you and make it available to the IRS for your debt. This type of tax levy is often confiscatory and can cause immeasurable financial damage to you.
Garnishing your wages is just the first step as bank accounts, retirement accounts, investments, businesses, property and finally your social security payments can be seized until the lien is satisfied. If these amounts do not settle your debt they will begin proceedings to seize property such as your home, cars, trailers, commercial real estate and nearly everything else that is legally an option for them to seize. Once the procedure has started it is difficult to stop the IRS from taking what they want until the debt is satisfied.
A few people when they find themselves in this position can wait it out and then go about their lives. However, most of us would be devastated by the reduction in liquid income coming into our households. The best thing that you can do when you get behind is to try and work with the IRS agent. By showing that you want to pay the debt you may be able to negotiate a settlement or reduce your debt to livable payments. Just because you cannot make the full payment does not mean you can not find a suitable alternative which may include a reduction in the amount that you owe.
Employing a tax professional may seem expensive at the time but if your IRS levy is such that your home and other property is in danger then the cost should be miniscule in comparison. A IRS garnishment tax levy can be frightening, but you have the right to representation as well as the right to negotiate a settlement under current tax law. Understand what is happening before you find yourself in trouble is good advice in this situation.
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