Showing posts with label tax levy. Show all posts
Showing posts with label tax levy. Show all posts

Wednesday, January 13, 2021

How a Tax Levy Can Affect You

“Tax levy” is probably one of the most dreaded phrases in the English language, and, once you understand what it is, it’s easy to see why. A tax levy is a measure enacted by the IRS to collect on money that you owe. It can take different forms, such as the garnishment of your wages, or the seizure of an asset you possess, like a piece of property or the money in your savings account. In order to be affected by a levy, you’d first have to owe unpaid back taxes, but, once you do, and once you’ve been notified as such, watch out! Tax levies are serious business.  

It Won’t Happen Out of the Blue  

The good news is that a tax levy shouldn’t catch you completely unaware. As long as your contact information is current with the IRS, you should have received plenty of warning that a levy was possible. In fact, the IRS can’t and won’t issue a levy unless it has first informed you that you owe money and then, upon your lack of payment, sent a notice of intent to levy. Even after this notice, you still have a month to appeal the IRS’ decision. But, if you don’t act, then a levy is entirely possible and likely.  

Paying is the Easiest Way Out  

As you can imagine, a tax levy can be incredibly devastating. But, there is one easy way out: pay your tax debt in full. If you can’t do that, then your next best option is to contact the IRS to try and work out an installment agreement or other solution. However, the IRS is more likely to work with you if you contact them before a levy has actually been enacted, so the quicker you take action, the better. Of course, that information doesn’t help you much if you’re already facing a levy and its consequences. In this case, reach out to a tax professional who can help you to explore different options to lift the levy. Or, if you've simply received notice of the intent to levy, work with an expert to keep the levy from actually happening. Remember, the IRS uses a levy as a last resort, so it’s always best to not let one occur in the first place. 

Wednesday, June 6, 2018

Are You at Risk of a Tax Levy?


Filing taxes, knowing how much you owe, and then figuring out how to pay it all can be difficult. In fact, many people report being confused during tax season. Unfortunately, though, if you don’t take care of your tax liabilities like you’re supposed to, you could find yourself facing a tax levy.
A tax levy happens when the IRS takes some of your assets, like money in your bank account, or when it chooses to garnish your wages. Fortunately, you’ll be notified before this type of thing happens.  


You’ve Been Warned
As mentioned, the IRS doesn’t just take your money out of the blue. Instead, it will notify you when you owe back taxes. It will also give you deadlines for when the money has to be paid. If you ignore these notices for too long, they won’t just go away.

Instead, it is likely that you will eventually receive a CP77 notice, which will inform you that the IRS plans to levy assets and collect on unpaid taxes. Once you receive this notice, it is imperative that you act fast.

You have several options for what to do when you get this notice. You can attend a hearing if you feel the IRS is not charging you a correct amount. To sign up for the hearing, you simply have to fill out Form 12153 by the required deadline.

You could also request an offer in compromise with the IRS, which would allow you to settle with the IRS and pay an amount less than what you actually owe. Alternatively, you may be able to set up a payment plan with the IRS to pay off the amount you owe in more manageable chunks.

Deciding what the best route is for your situation can be difficult, which is why it is advisable to speak to a tax professional, ideally before things ever get to this point.

No matter what, one thing is for sure- if you ignore the levy notice, the levy will happen.

The Importance of Professional Assistance
As mentioned, it is very important that you seek professional financial advice if you are facing a levy, having trouble paying your taxes, or have other concerns about getting “squared up” with the IRS.
Tax law is confusing, so don’t try to go it alone if you’re not familiar with how everything works.