How to Handle an IRS Tax Levy Effectively

Tax obligations are among the toughest debts to do away with. Only bankruptcy cannot wipe out all the unpaid taxes, and the taxation authorities have more power to seize properties than other forms of creditors.

For example, the IRS can use a tax levy to take possession of the property without having to bring you to court and win a judgment against you. On the other hand, a bank or credit card company would have to bring a lawsuit against you successfully, and meet other requirements.

Fortunately, it is possible to avoid a levy.

When does the IRS issue a Tax Levy

If you do not pay your taxes (or make arrangements to settle your debt), and the IRS decides that the next appropriate action is to levy a levy. IRS will seize any property that you have a right of ownership or interest. For instance, the IRS could levy property that is yours but is held by someone else (such as your wages, retirement accounts, dividends, bank accounts, licenses, rental income, accounts receivables, the cash loan value of your life insurance, or commissions). Or, the IRS may seize and sell your assets (such as your car, boat, or house).

What to expect if you are issued with an IRS Tax Levy

A fee is always a probability if you owe money to the IRS or any other taxing body. Typically, however, it is an option-of-last-resort: creditors will provide plenty of notice before seizing assets. Ideally, you’ll find ways to avoid the levy happening.

Which is the final notice that the IRS issues before closing in on property?

Before using a fee, the IRS sends multiple letters, so be sure to open your mail. Keep your mailing address up to date, and if you have financial problems, connect with the IRS. A levy may be imminent if you receive a document titled Final Notice of Intent to Levy and Notice of Your Right to Hearing. It is best to contact the IRS at that point and to clear things up as soon as possible.

What to do if the IRS seizes your property

If the IRS confiscates your house or other property, the IRS will sell your interest in the property and add the proceeds to your tax debt (after the expense of the sale). The IRS must determine a minimum price for the bid before selling the land. The IRS will also provide you with a copy of the estimate and give you a chance to question the estimation of the fair market value.

The IRS will then provide you with the sales notice and advertise to the public the pending sale, usually via local newspapers or flyers placed in public places. Typically, the IRS must wait at least ten days before selling the land, after giving public notice. You can contact a Tax Attorney who will provide you with the right guidance on how to go about the situation.

Conclusion

The IRS usually starts the tax levy by reaching out to the individuals or organizations that pay you. The IRS is asking these companies to explicitly give future payments to the IRS, rather than you.

In most cases, such companies or persons comply because the IRS holds them personally responsible for those sums if they do not. One of the best ways of handling an IRS Tax Levy is by contacting a licensed tax attorney who will guide you appropriately on how to go about it.