What exactly is a tax levy?
A tax levy involves the legal seizure of your assets or property to settle an unpaid debt. While traditional levies typically require a collection agency to obtain a court order for enforcement, the IRS has the authority to levy assets directly to collect overdue tax debts.
Virtually no asset is immune from potential levy, including real estate, vehicles, watercraft, bank deposits, wages, retirement savings, rental income, the cash value of life insurance policies, and various other holdings. The IRS can initiate actions such as freezing bank accounts, seizing property, or assuming ownership of assets to satisfy unpaid taxes. However, certain items like clothing, educational materials, and basic furnishings may be exempt from seizure.
What amount of money does the IRS seize?
The IRS can notify you of its intent to levy through various methods, such as in-person delivery, leaving the notice at your home or workplace, or sending it to your last known address via certified or registered mail.
It's important to note: The IRS will never communicate its intent to levy via phone call, email, or text message. If you receive any threats of an IRS levy through these channels, it is likely a scam, and you should report it to the FTC immediately.
If you fail to pay your taxes after receiving the Notice and Demand for Payment, the IRS will proceed with a tax levy on your assets. They will provide you with a Final Notice of Intent to Levy and Notice of your Right to a Hearing at least 30 days before initiating the levy.
A levy can be stopped when you have fully paid your federal tax debt, the statute of limitations has expired, or you have successfully requested the removal of the levy. If a tax levy causes financial hardship, you can request its removal and explore alternative tax relief options.
Is it possible to remove a tax levy?
While completing IRS Form 9465 is straightforward, the IRS frequently rejects Offers in Compromise applications.
To improve your chances, prepare a compelling case showing financial hardship and an inability to repay your tax debt.
There's no set minimum tax debt needed to qualify; eligibility hinges on your unique financial situation and liability.
Can I qualify independently?
If the IRS has initiated a levy against you, you have the right to appeal and request the release of the levy. However, the IRS may deny your appeal, and the process can involve complex legal discussions. Therefore, it's often advisable to seek assistance from a tax attorney.
The IRS must lift a levy under certain circumstances, including if you have paid the full amount owed, if the collection period expired before the levy, if releasing it would enable you to fulfill your tax obligations, if you are enrolled in a Fresh Start Initiative program that prohibits the levy, if the levy causes economic hardship, or if releasing it will not hinder the IRS's ability to recover the owed amount.
If you believe you meet these criteria or if you believe the IRS levied your assets in error, you have the right to appeal and request the release of the levy.
Do I need professional assistance to remove a tax levy?
Taxpayers are not legally required to seek professional assistance to lift a tax levy. However, since tax levies typically arise from serious delinquency issues with the IRS, it is highly advisable to consult with a tax attorney when attempting to release or appeal a levy.
The decision to release a levy rests with the IRS and often requires a well-prepared case for resolution. While the IRS follows specific guidelines in considering levy releases, it is crucial for the taxpayer to effectively present their case.
TaxRise tax attorneys excel in collaborating with the IRS to negotiate favorable terms for levy release on behalf of their clients. They navigate negotiations adeptly, ensuring compliance while safeguarding client interests. Our team has a proven track record of successfully removing tax liens, stopping wage garnishments, and halting bank levies through strategic advocacy and compelling arguments.
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