IRS Tax Levies
IRS Tax Levies
When the IRS decides to seize assets in order to pay off a tax debt, they don’t require a court order and they aren’t limited to liquidating physical property like your car or home. In fact, they can access “any kind of real or personal property that you own or have interest in.” This includes your bank accounts, investments, wages, and even social security. IRS levies will also show up on your credit report hurting your chances with creditors.
To protect your bank accounts and other assets from being seized and liquidated, you will need the support of a CPA who is not only experienced in contesting IRS levies against taxpayers but also one who can negotiate a tax relief solution on your behalf. Without a feasible tax relief solution in place, any released levies may just be reapplied as interest fees that keep raising your debt higher and higher.
Franskoviak Tax Solutions can help you get your levy released, and stay released, in as little as a day. Not only that, you are guaranteed to get personalized attention for your case as we work to find a payment solution or deal that fits your needs. Contact us to schedule your free consultation today!
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Frequently Asked Questions About IRS Bank Levies (FAQ)
What is an Administrative Appeal?
An administrative appeal is the process in which a senior official or attorney, not necessarily a judge, within the agency will review the initial decisions made by FOIA regarding your case and determine whether to uphold or reverse that decision.
What is a Tax Levy?
A levy is the legal seizure of a tax payers’ assets to satisfy any back taxes that they owe. A Levy is different from a tax lien because a lien is only a claim to your assets while a levy is the actual seizure of the assets. The IRS can levy your bank accounts, investment accounts, wages, social security, pensions, insurance policies and/or some of your actual physical assets.
Can I stop a Tax Levy?
The IRS generally uses tax levies as a last resort option and would prefer to come to some other arrangement to resolve the taxes owed.
There are many different actions that can stop a levy, below are the most common:
Offer in Compromise (OIC): An offer in compromise is an agreement to pay much less than the total amount of taxes owed. This option only exists for the taxpayers that qualify and are struggling financially.
Payment Plan: The IRS offers a variety of payment plans depending upon your financial situation. Once you establish a payment plan the levy will stop.
File an Appeal: You can appeal the levy if all taxes were paid before the notice was sent. You can also appeal if you were in bankruptcy when the notice was sent, or if you want to make a spousal defense, or you want to request other collection options.
Request Financial Hardship: If it can be proved that the levy is a significant financial hardship for you then the levy may be stopped. This does not mean taxes do not need to be paid, but it will temporarily stop the collection actions and try to settle with a different solution.
It is best to talk with a qualified tax resolution professional to determine if you qualify and which method is the best for you.
There Are Many Different Types of Tax Levies
The type of levy that the IRS might use depends on the situation.
The IRS could issue a levy to collect from your 1099 payments. They can levy any amount of money that you are currently owed for work that has already been done, but they cannot go after anything owed to you in the future for work to be done.
With a wage levy or wage garnishment, the IRS taxing authorities will contact your employer and request withdrawal payments for your unpaid taxes.
With a bank levy, the IRS will contact your bank and request that they put a hold on your funds and after 21 days the IRS will deduct the funds from your account. If they cannot collect the full amount owed, they will continue until the debt is satisfied.
In this case the IRS can seize almost any form of asset and they sell it to cover tax debts owed. They could seizure items such as your car or house.
Other Asset Seizure Possibilities Include:
If it comes down to it the IRS can also place levies on retirement accounts and dividends, life insurance and rental income.
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