A Notice of Levy is the official document that the IRS sends a taxpayer with outstanding debt to inform them that their assets will be seized to pay that debt. The IRS can levy, or seize, property in several different ways. First, they can directly seize assets like a car, boat, or home. They can also levy assets held by a third party, such as by garnishing wages from an employer, collecting from a retirement account with a financial services company, or reducing social security payments. They can also levy money from a federal or state tax return.
If you’ve received a Notice of Levy, then it likely isn’t your first correspondence with the IRS. Prior to seizing your assets, there are several steps they are required to take. They are as follows:
- First, the IRS determines your tax debt and sends a Notice and Demand for Payment, which instructs you how much to pay and when. This notice can be given in person, left at your home or work, or sent via certified or registered mail to your last known address.
- If this notice is ignored or you refuse to pay, then they will send a Notice of Intent to Levy. This document is to notify you that the IRS intends to seize your property to satisfy the tax debt outlined in the Notice and Demand for Payment. You are given 30 days to respond.
- If you do not respond satisfactorily to the second notice, then the IRS will send a Final Notice of Intent to Levy and Notice of Your Right to a Hearing. These documents are the last warning before the IRS actually takes your property.
If you’ve received a Notice of Levy, then it’s imperative that you take swift action to rectify the problem. The IRS requires that you take one of three actions:
- Pay the debt in full immediately.
- Pay as much as you can, and make arrangements with the IRS to pay the rest in one or more installments. In this case, the IRS will determine whether or not you qualify to do so based on your financial situation.
- Contact the IRS to dispute the tax debt. If you believe that you owe less than the amount the IRS has calculated, or that you aren’t liable at all, you can make a claim against it.
The IRS’s goal is to collect tax debts, not to help you figure out how to minimize their financial impact on your life. Regardless of which action you want to take, working with an experienced tax attorney may be able to help you resolve the issue quickly and to your benefit. For example, a tax attorney can help you provide documentation that qualifies you for a smaller settlement, or that allows you to pay incrementally.
To learn more or to speak with a tax attorney, contact Florida Tax Solvers today.