When you are in debt to the IRS, one of the most extreme ways the tax agency can ensure that you pay is by levying your property. A tax levy is when the IRS legally seizes your assets in order to settle your debt.
If you haven’t paid your tax bill after receiving a Notice and Demand for Payment from the IRS, the agency will enact a levy. You will know a levy has been enacted on your assets because the IRS will also issue a Final Notice of Intent to Levy and a Notice of Your Right to a Hearing at least 30 days before the levy goes into effect.
There are different kinds of levies that can be authorized, depending on your situation. A bank levy is when your bank places a hold on your funds at the IRS’ request, deducting them 21 days later to pay your debt. The IRS may continue taking funds from your account until the debt is paid off.
Another type of levy is property seizure, in which the IRS claims your property, sells it, and applies the proceeds to your debt. Cars and homes are two of the most common pieces of property the IRS seizes.
But the IRS is not limited to taking money from your bank accounts or selling your property — it also has the power to seize your life insurance, retirement funds or passport to force you to pay.
Having your assets levied is obviously a difficult position to be in, but it’s not an impossible situation to escape. The best way to get rid of a levy is to pay your IRS balance in full, after which the levy will be removed in 30 days. But this is not doable for many people.
Another great option is getting in touch with a dedicated tax professional who can help you weigh your options, which may include setting up a payment plan, filing an appeal or proving financial hardship. A levy doesn’t have to ruin your finances, and an experienced tax pro can help you get rid of levies once and for all.
Schedule a free consultation with one of our tax associates and get your levy resolved.