The tax industry has its own vernacular, which can be confusing for the average taxpayer. With terms like wage garnishment, liens, and levies floating around, it can be hard to determine exactly what your issue is and what can be done about it.
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Tax Levy
A tax levy is a legal seizure of a taxpayer’s assets in order to repay a debt. It is often considered to be one of the harshest collection actions taken by the IRS. The IRS will issue a Notice and Demand for Payment, and if you neglect to pay any taxes owed, a tax levy will be enacted. They will also issue a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days prior to the levy’s start date. Tax levies can take several forms and depend on each individual situation.
A bank levy occurs when the IRS instructs your bank to place a hold on your funds. Funds will be deducted 21 days later and may continue to be deducted until the balance is paid in full.
A property seizure occurs when the IRS seizes any of your assets in order to sell it and cover the debts. Items subject to seizure include your home or car.
Levies are not limited to the aforementioned forms, and may also entail collection of 1099 payments as well as seizures of retirement accounts, life insurance, and passports.
How Can I Resolve a Tax Levy?
Once a levy has occurred it can be tricky to get your assets returned to you. The simplest way to remove a tax levy once it has been enacted is to pay off your tax debts in full. The levy will be discharged within 30 days of receipt of your payment. However, most taxpayers typically cannot afford to pay a large sum.
Certain arrangements can be made, such as:
- Entering into a payment plan
- Proving financial hardship,
- Filing an appeal
- Rarely, submitting an Offer in Compromise
How Can FreshStartInfo Help?
Tax Levies are undeniably a difficult situation to face, but you don’t have to navigate this hardship alone. Here at FreshStartInfo, we partner with experienced tax professionals who have negotiated federal tax settlements for years. Our partners have the knowledge necessary to ensure all forms are properly filled out and can help you determine the best course of action. Not only can they assist with removing levies, but they can also discuss tax relief solutions to help minimize your debt.
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