IRS Notice of Levy
The biggest nightmare that comes to reality is an IRS Levy. Receiving an IRS levy is downright scary. In this post, we will discuss what an IRS levy is, how it works, ways to prevent it, and if in case you've received one, what to do to reverse it. So, sit back and relax as we unravel the mystery behind an IRS levy
TLDR;
An IRS Levy is legal when the IRS has sent the proper legal warnings
An IRS may levy your income sources, property & Bank Accounts
Multiple Levies can be issued, and some levies can be continuous.
An IRS Levy can be reversed & stopped
You may qualify for Tax Relief or Settlement if you are unable to pay your tax debt
What is An IRS Levy?
An IRS levy is a legal seizure of your property by the IRS to settle your unpaid tax debt. In other words is a government taking of your money & property. An IRS Levy is also known as a garnishment. The IRS Levy permits the revenue agency to take away your money, cars, homes, or any other properties that the agency sees may be sold to settle your tax liability. The IRS uses a levy when all financial efforts to secure payment from a delinquent taxpayer have failed. The IRS can levy any asset that is under your name or of which you are the beneficiary.
How does the IRS notify you of a Levy?
Before the IRS typically issues a levy, it has already sent you a bill for the outstanding taxes. Hence, you will not receive the levy suddenly. You should have received several notices about the amount owed, especially after you have defaulted on a payment plan or outrightly refused to pay. After several failed attempts to recover the debt, the IRS will send a Final Notice of Intent to Levy, indicating its intention to levy your property in 30 days.
Why did the IRS Levy?
The IRS may levy your accounts or property if you owe them an unpaid tax debt. However, certain conditions may trigger premature levies on your accounts or property. The IRS could levy your assets if you filed a bogus return, disregarded earlier IRS levy notices, are involved in bankruptcy proceedings (although, in some cases, an automatic stay may stop the levy action), are victims of identity theft, or the property the IRS wants to levy on is jointly owned.
How to reverse an IRS Levy and how to prevent levies?
If an IRS levy has already seized your assets, you can take certain actions to reverse the levy. You can make arrangements to pay the debts owed, request an Installment Agreement, or apply for Currently Not Collectible Status. Alternatively, you may file an appeal after receiving the Final Notice of Intent to Levy, request a Collection Due Process hearing with the Office of Appeal, or file an offer in compromise.
To prevent an IRS levy, you need to act quickly. I recommend responding to IRS letters indicating tax debt as early as possible. If you cannot pay the full amount owed, contact the IRS to arrange installment payments, apply for Currently Not Collectible status, or request a hardship extension. To stop collection actions, you may seek legal help, file for bankruptcy, or reach a settlement with the IRS.
