Key Features of an IRS Tax Levy

Key Features of an IRS Tax Levy

There are many instances whereby a taxpayer may find themselves on the wrong side of the taxman. If debt reaches up to a certain point, the Internal Revenue Service may close in on you and file a tax levy against you.

Challenges that come with an IRS Tax Levy

The limitations of having an IRS Tax Levy imposed on you are many and cannot be underestimated. The collection methods used by the IRS include having your account frozen, seizure of assets, and even slashing your wages or salary to meet the debt owed to them. The whole situation can be overwhelming and may leave you dead and broke.

What happens if the IRS has already slashed my wages?

If such a situation arises, you still have several options to exhaust to prevent the impact caused by IRS Tax Levy. The law only allows the IRS to take only a certain percentage of the wage of an employee.

This is according to the Publication 1494 that was passed in 2016 that prevents them from taking the gross wage. However, the employer must be aware of this and is required to file the necessary documents when they receive an IRS Tax Levy on one of their employees.

At what point is a Tax Levy issued?

Before a Levy is issued, the IRS must first notify the person through an official notice indicating an intent to Levy. The notice will give you a 30 day grace period to respond to them. Failure to respond will warrant the IRS to move in and seize your property or wages.

Apart from the notice, several notices may be issued before the IRS seizes the property; these include notice of balance due, bill for tax still owed, immediate action required, and the urgent notice- intent to Levy.

If the IRS Tax Levy is issued to an employer on behalf of an employee, the employer should remit the funds immediately.

How to stop IRS Tax Levy

The good thing about IRS Tax Levy is that it can be prevented if you act on time and take the necessary steps. One of the ways of achieving this is by paying the debt in full. However, if this is not achievable, you may enter an agreement with the IRS and pay the debt in installments.

Another method is by appealing the decision to seizing your property. This can be achieved before or after the property seizure. The IRS can be compelled to return the property if you successfully prove they made a move illegally if the property seized is more valuable than the debt owed or in case you had made a prior attempt to pay the debt.

Conclusion

If you receive a notice of an IRS Tax Levy, you should take immediate action. The IRS is known to use harsh methods of collecting a debt, and in many instances, the person is left broke with nowhere to start. You should be able to reach out to a tax relief professional or attorney who will guide you on how to solve the issue.

Once you receive the IRS Tax Levy notice, you should take immediate actions that are geared to counteracting the Levy. Knowing how the IRS works may be helpful as well.