A tax levy is one of the most destructive collection tools used by the IRS, which involves the legal seizure of assets against outstanding tax bills of a taxpayer. A tax levy should, however, not be confused with a tax lien. A tax lien is only a claim made against a taxpayer’s asset, whereas a tax levy is the legal seizure of the assets. If you have any unpaid tax bill, the tax authority can levy your bank accounts, financial belongings, investment accounts, wages, pension, insurance policies, and even physical assets to satisfy a tax debt. The post outlines various types of IRS levies and the way out.
Types of IRS Levies
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IRS Bank Levy
During an IRS bank levy, the tax authority contacts your bank and demands to freeze the available funds in your bank account and deduct money depending on the owed amount. If the debt is not fulfilled in the first go, the IRS will keep accessing your account as and when the money appears. When it comes to the IRS bank levy, any account in your name is at the risk of seizure regardless of whether it is your money. Financial institutions are under obligation to comply with IRS requests as non-compliance makes them liable for severe penalties. Once your bank account is under IRS scrutiny, you will not be able to access the funds. If you are facing an IRS bank levy in Texas, consult an attorney for tax levy help.
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IRS Wage Levy
An IRS wage levy, or wage garnishment, is the deduction of a part of your wage against an outstanding tax debt. The IRS contacts your employer demanding a certain percentage of your pay for unpaid taxes. Your employers will never deny such a request, as doing so would make them liable for the amount owed. Wage garnishment is a continuous process and the amount would continue to be sent to the IRS unless you have any alternatives to fulfill the debt or the tax authority has collected enough. That said, the wage garnishment can be reduced or removed, if a tax attorney proves your hardship to pay the taxes.
The IRS has the authority to react with a tax lien or levy when a citizen fails to fulfill their taxing duties. Essentially, if you don’t pay taxes, you owe money to the IRS. In order to secure the payment of such debt the IRS might decide to impose a tax lien, securing your assets as a guarantee of payment. Taxpayers who do not know how to deal with an IRS tax lien must seek help from a tax attorney. If the problem continues, an IRS tax lien can progress into what we discussed as an IRS levy, when your assets are actually seized as an involuntary collection of debt payment. Getting assistance with a potential or actual tax lien early on is an essential part of preventing losing your valuable assets. Remember, The IRS uses a levy as a last resort to collect tax dues and is willing to make other arrangements to resolve outstanding tax bills.
How To Get Rid Of An IRS Tax Lien Or Levy?
A levy is a tool used by the IRS to collect unpaid taxes from taxpayers by seizing their assets, such as real estate, vehicles, bank accounts, and wages. It can be a distressful situation for taxpayers, but there are a few ways to stop an IRS levy and arrive at a settlement with the tax agency with the help of an IRS tax lawyer. In this section, we discuss how to stop an IRS levy early in the process, so that it does not impact your life.
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Written Communication
One of the first remedial actions taxpayers can take after they receive a collection notice from the IRS is to send a letter to the agency. In such a written communication, they can mention the financial hardship that they are facing and provide evidence of how a levy will worsen the situation. If the IRS finds the cause for nonpayment a just reason, it may stop the levy.
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Full Payment
Clearing the outstanding taxes in full is the best way to stop a tax levy. If possible, taxpayers may use their savings, borrow from family or friends, or even sell off some of their assets to accumulate the necessary funds. Another way to pay the due tax amount in full is to take a loan, but only if the interest rate is lower than what the IRS charges as penalties and interest.
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Installment Agreement
An installment agreement, or partial payment agreement, offers a convenient means to pay off tax debts. The provision allows taxpayers to make monthly payments of an amount they can afford. Generally, the IRS can allow up to 84 months for taxpayers to clear their due taxes. While interests would continue to accrue in this agreement, there’s a drastic reduction in the penalty as long as the taxpayer pays on time.
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Offer in Compromise
It is an agreement with the IRS to settle tax liabilities for less than the actual amount owed by a taxpayer. To qualify for this payment arrangement, a taxpayer needs to prove that they are not in a position to pay off their tax debts through any other method. Along with this, the IRS needs to convince itself fully that there is no other way for them to collect money from the taxpayer. The ability to settle for less than the actual tax amount can be a huge relief to taxpayers.
The Way Forward
Simply put, the best way to solve any kind of tax problem is timely action. Better yet if it is professionally guided and smart, timely action. We are referring to the kind of action that we, at Nick Nemeth’s Law offices, can offer.
Our team can provide valuable assistance regarding any IRS tax lien, levy, or penalty situation. If your property is at risk, do not take any chances. You should use the best resources to get rid of your tax lien or levy and settle your taxing debt issues as quickly as possible.
The best possible help can only come from an attorney experienced in tax law who successfully handles similar cases. Expertise is priceless in any situation, especially when there’s so much at risk.
Lack of information and tax law expertise can do more damage than good. A professional tax attorney in Dallas, Texas, can best help you evaluate your tax lien or levy situation and present an action plan that works best in your situation.
Seeking Professional Assistance
There’s no reason why you should handle your taxing problems alone. Our Dallas tax attorneys can help you find the best solution for your IRS levy problem. We help clients obtain the best IRS settlements, agree on payment plans, and achieve lien withdrawals as part of our daily jobs! We know what we are doing and are ready to help you face all the taxing problems that come your way.
Take the First Step Toward Redemption
If you are facing any IRS levy, it is advisable to take swift action or immediately seek professional assistance for IRS problem resolution.Contact us and schedule your free tax evaluation and consultation. We can help you figure out your next step to get out of the IRS levy problem. Our tax attorneys in Dallas and Fort Worth, Texas, are just a phone call away. For a no-obligation, free consultation, simply call (972) 426-2553 or fill out our contact form, and we will take it from there.
