- Personal Finance
IRS Levy - What You Need to Know
An IRS levy can be a serious consequence for individuals who fail to pay their taxes on time or default on an agreed payment plan with the Internal Revenue Service. Generally an IRS levy is often a last step that is not needed for people who settle debts and don’t ignore letters from the organization. The Internal Revenue Service states that they will not issue levies unless three factors are met. The first factor is that the person just didn’t pay the taxes owed by the due date. The second factor is that the person received a letter known as Demand for Payment. The Internal Revenue Service sends out a letter stating that the individual owes a certain amount and it must be paid within a certain time frame or that person must come up with an agreed upon payment plan.
If the Internal Revenue Service doesn’t hear from the individual then a second notice is sent out, known as Final Notice. The Final Notice states that they will issue an IRS levy 30 days from when the person received the letter. The individual will then be given the option to request for a hearing if he or she chooses to do so. Then if these three factors have been met and an individual still ignores contact from the Internal Revenue Service, then an IRS levy or lien will begin.
IRS Levy & Other Resources
IRS Levy – What Can be Levied
An IRS levy can be placed upon a person’s wages, any type of government refund, stocks, savings bonds, savings and-or banking accounts, Social Security income and other forms of assets. Boats, vehicles, motorcycles and other items may also be subject to seizure. Generally what happens is the Internal Revenue Service will order a wage garnishment to an individual’s employer. According to information about the Federal Payment Levy Program, generally about 15 percent of wages are garnished per pay period; however, the Internal Revenue Service may look into other factors before issuing a 15 percent wage garnishment, such as funds that are owed to decide on a percentage that may be less.
If a person is self-employed where a wage garnishment cannot be issued then an IRS levy may be placed on a bank and-or savings account. Funds that are available in either type of accounts will be placed in a freeze period. What this means is that the account holder to the banking or savings accounts will be unable to access available funds. What it also means is that the individual or individuals on the account won’t be able to take any of the funds out until a levy is lifted. The Internal Revenue Service expects that the person or persons on the account to contact them within 21 days to settle the matter, if they fail to do so then funds that are in accounts will be removed that is owed. The Internal Revenue Service can also seize funds for penalties and interest that have accumulated to satisfy the debts.
If a wage garnishment and banking assets cannot be taken for a particular reasoning then the Internal Revenue Service will begin proceedings to seize or put liens on other forms of assets such as a house, car, property or any other belongings to satisfy the debt or debts.
IRS Levy Conflicts
Through out the years, a great deal of individuals have tried to battle the Internal Revenue Service on the grounds that they have no authority or there is no law that states that income taxes must be paid. As a result, many individuals have lost their homes and other assets to seizure and some have even had to serve jail time.
What You Should Do About an IRS Levy
If you have received notices from the Internal Revenue Service and cannot come up with the funds or have no way to paying then you may be able to work out a payment plan. Consider contacting the nearest Public Welfare office or Attorney Bar Association in your area to see if you qualify for legal aid or to find an attorney who may work pro-bono to help you through your case. It may be especially helpful to speak to attorney to protect your assets and rights through the ordeal with an IRS levy and other seizures.Reference for IRS Levy – What You Need to Know: