Understanding IRS Levies
An IRS levy is a legal tool used by the Internal Revenue Service (IRS) to collect unpaid taxes. It allows the IRS to seize your property, including wages, bank accounts, and other assets, to satisfy your tax debt.
Consequences of an IRS Levy
An IRS levy can have severe consequences, including:
- Loss of income: Your wages can be garnished, reducing your take-home pay.
- Frozen bank accounts: The IRS can freeze your bank accounts, preventing you from accessing your funds.
- Seizure of property: The IRS can seize and sell your property, including your car, home, and other valuable assets.
How to Avoid an IRS Levy
The best way to avoid an IRS levy is to:
- File your tax returns on time: Late filing can lead to penalties and interest, increasing your tax debt.
- Pay your taxes in full: If you can’t pay your taxes in full, contact the IRS to discuss payment options.
- Respond to IRS notices: Ignoring IRS notices will only worsen the situation.
- Work with the IRS: The IRS is willing to work with taxpayers who are experiencing financial hardship.
How to Get a Levy Released
If the IRS has already levied your property, you can request a release by:
- Paying the tax debt in full: This is the most straightforward way to get a levy released.
- Entering into an installment agreement: You can arrange to pay your tax debt over time.
- Proving financial hardship: The IRS may release a levy if it determines that it is causing you undue financial hardship.
- Appealing the levy: You can appeal the levy if you believe it is incorrect or unfair.
Steps to Take if You Receive an IRS Levy Notice
If you receive an IRS levy notice, it’s important to:
- Contact the IRS immediately: Call the number on the notice to discuss your options.
- Gather your financial information: You will need to provide the IRS with information about your income, assets, and expenses.
- Consider your options: Explore the various options available to you for resolving the levy.
Additional Resources
An IRS levy can be a stressful and overwhelming experience. However, by understanding your rights and taking the necessary steps, you can protect your assets and resolve your tax debt. Remember, the IRS is willing to work with taxpayers who are experiencing financial hardship.
How To Stop An IRS Levy
FAQ
How do I stop an IRS levy quickly?
Will payment plan stop IRS levy?
Can levy be reversed?
How do I contact the IRS about a levy?
What should I do if I owe a tax levy?
If the levy is from the IRS, and your property or federal payments are seized, call the number on your levy notice or 1-800-829-1040. If you’re already working with and IRS employee, call him or her for assistance. Be prepared to propose an alternative way to pay your taxes , if you owe the tax debt.
How can I avoid a tax levy?
You can avoid a levy by filing returns on time and paying your taxes when due. If you need more time to file, you can request an extension. If you can’t pay what you owe, you should pay as much as you can and work with the IRS to resolve the remaining balance. The key is to be proactive; so don’t ignore IRS billing notices.
How do I remove a tax levy from my tax return?
The IRS will look at your income, expenses, equity in assets, and ability to pay to decide whether to accept your offer. Normally, when you request an OIC, the IRS will remove the levy. Just in case, contact IRS Collection to let them know you filed for an OIC and ask them to remove the levy.
Can a tax levy be removed?
Removing a Levy or Wage Garnishment When the IRS takes money out of your bank account (levy) or your paycheck (wage garnishment), you have options. You can get the IRS to remove the levy, but only after you pay off all the back taxes you owe, or set up a payment agreement with the IRS.