When one thinks about IRS collections, 2 typical methods come to mind. An IRS levy and an IRS tax lein. Many have confused these as being the same, but, actually, they aren’t.An IRS tax levy is a seizure of personal assets to pay a tax debt. On the other hand, a tax lien safeguards and secures the government’s interest in a property as well as any legal rights to property. It does not actually seize the property. Generally, it comes into effect when the property is sold. The IRS has rights to the proceeds at the time of the sale. However an IRS levy actually seizes personal property. Before the IRS can collect, generally 3 conditions need to be met: 1. The IRS has assessed the tax debt and has sent a “Notice of Demand for Payment”. 2. The tax payer has ignored or simply declined to pay the tax balance. 3. The IRS sent a Final Notice of Intent to Levy and Notice of Your Right Hearing a minimum of thirty days before the tax levy. The IRS could place it at a home, a place of business or deliver it to the last known address that the IRS has on record. There are 4 common forms of IRS levy sources: 1. Bank Accounts: When the IRS takes money directly from your bank accounts. One usually wont know of it until it has actually happened. The bank will be required to hold the funds up to the amount due on the day the levy came. If the levy is not discharged within 21 days, the bank is required to send the funds to the IRS. 2. Wage Levy: This levy is sent to your employer and requires that the employer withhold a specific portion of a pay check. The IRS can levy up to 85% of your pay check. The IRS can also levy Social Security Payment 3. 3rd party accounts: This IRS levy would include retirement accounts, stock accounts, 1099 sources and essentially any source of income or assets with a few exceptions. 4. Assets: Because this is typically difficult for the IRS to do, it is the least common type of IRS levy. This would include cars, residences, boats or basically any other type of asset. There is also a difference between an ongoing tax levy and a onetime levy. A continuous levy wouldconsist of wages, social security and other types of income. A one time levy would include 1099 income and a bank levy. The IRS may only take the amount in the account or the amount due the independent contractor the day the IRS levy was issued. This does not hinder the IRS from levying once more. Tactics to stop irs levy procedures: An IRS tax levy will continue until the tax liability is paid, the statute of limitations runs out, or other arrangements are made, which can include an Installment Agreement, getting the account put in Section 53 or a hardship, or getting an Offer in Compromise accepted. Also, hiring a tax expert with practical experience in working with the collection department of the IRS will ensure that the tax laws are worked to the tax payer’s advantage. An knowledgeable tax professional will also know how to resolve tax liabilities and the quickest method to stop irs levy activity based on the tax payer’s particular situation.
Cynthia Kuhne has been helping people take care of their tax problems successfully for over 16 years. She is a licensed Enrolled Agent with both the knowledge and experience to stop IRS levy action quickly. She is the founder and president of CKTax Inc., a full service tax relief company with an “A+” BBB record. If the IRS has attached a levy to your assets, is about to, or you just have a tough tax problem, visit www.cktax.com or call 888-894-2005 now.
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