To ensure that you settle your penalties and tax debt, the IRS uses the levy. Your income and your properties can be levied. It is best to act quickly if you get a Levy notice as you can be financially crippled by this drastic method.
You will receive a Demand for Payment before you’re served with a Levy Notice. To get help in avoiding a levy, consult a tax lawyer and present proof why the penalties and taxes asked from you were not settled.
The IRS Levy Notice allows you 30 days to ask for a Collection Due Process hearing at the local IRS Office of Appeals. If counseled to do so by your tax lawyer, you must take this request and get ready for the hearing. If the levy is the outcome of an IRS mistake, you’ll still need to go to the hearing to justify the case and give evidence that your taxes were paid and the IRS has, in fact, committed an error. This is an unfortunately common problem, but many people fall prey to unfair wage and property levies when they ignore the IRS Levy Notice.
There are several situations which will prevent the IRS from continuing a levy. Making the IRS Office of Appeals know of these cases is your responsibility. If you’ve filed for bankruptcy, the IRS can’t subject you to a levy. Similarly, if you have settled the unpaid debt before or immediately after the Levy Notice, you shouldn’t be levied. One loophole to avoid an IRS levy that most people are unaware of is the statute of limitations. The statute of limitations stops the IRS from collecting taxes that were assessed more than 10 years ago. You’re exempt from paying penalties and taxes and the levy if the collection period of the tax expired before your IRS Levy Notice was mailed.
You can work out an installment option with the Office of Appeals at the Collection Due Process hearing. Rather than getting your bank account levied or your wages garnished by the IRS, this is indeed a better option.
An IRS levy will go on unless it’s officially released, your debt is settled, or you meet the statute of limitations and the IRS can no longer get those taxes. The IRS will refund your bank fees if your bank account was erroneously levied because of an IRS error. To qualify, you should file for refund within 30 days.
Ignoring a Levy Notice will only worsen your IRS issues. It is better to get help as soon as possible to safeguard your assets.