When a taxpayer is substantially and protractedly in arrears to the IRS, the agency may place a tax levy on his personal possessions. A tax levy is often confused with a tax lien, which is really nothing more than claim that is used as security for a debt. But a tax levy is when property is actually seized to satisfy a tax debt. How can they do this? Because the IRS doesn’t play by the same rules as other collection agencies. They are, after all, a federal agency.
What can they take?
If you do not pay what you owe or at least make arrangement to settle you tax debt, the Internal Revenue Service has the legal right to confiscate and sell any asset you own, even if it is held by someone else. For example, they can garnish your wages, retirement accounts, bank accounts, rental income, or any other accounts receivable. They may also, of course, seize any real property you own, such as your car, your boat, or your home.
The Tax Levy Process
The IRS must abide by federal guidelines before they seize and sell the possession of any citizen. If they ignore any of the following requirements, a taxpayer may be able to appeal the tax levy process and recover his personal possessions.
1. Firstly, the IRS must send a Notice and Demand for Payment.
2. Secondly, the agency must give the taxpayer a reasonable 토토핫 amount of time to respond, often about a month.
3. Thirdly, the IRS must send a Final Notice of Intent to Levy and Notice of Your Right to a Hearing.
If you do not respond to this final notice, the IRS has the authority to confiscate any of the aforementioned assets you own or have an interest in.
Where to go for Tax Advice
The vast majority of taxpayers who get themselves into hot water with the IRS do so because they ignore IRS letters. Instead of dealing with the problem head on, they often avoid it until it becomes almost insurmountable. At this point, they are left with only two options. They can either pay the tax debt in toto, or try to negotiate a manageable settlement with the IRS. As you might expect, most tax debtors cannot afford to pay what they owe in one lump sum. Therefore, they are forced to negotiate.
With so many missteps behind you, it is important not to make another one at this crucial, final stage. No matter what anyone might tell you, negotiating with the IRS on your own is almost always a mistake. The enormous federal agency employs some of the best tax professionals in the world. In other words, it is almost impossible for a neophyte to win when it comes to tax returns. In fact, they will almost always work out a deal that has you paying every penny and then some.