IRS Use of Bank Levies
We live in a country that affords us a large number of financial opportunities and options and this kind of freedom is something that we should not take for granted. As a way to keep the foundation of the country functioning properly, residents are expected to pay taxes, and your tax is important to the regulation of many different aspects of American life. However, some people may get behind on their taxes and may end up owing a large amount of money to state and federal government. When these problems arise, you may end up dealing with the Internal Revenue Service or IRS, and you may even facing bank levies.
What a Levy Does
Levies are a tool that are used by the IRS in order to get the money that may be owed in back taxes. Essentially, a levy is seizure of property in order to settle your tax debt. When a levy is placed, the IRS will have legal recourse to seize property up to the value of the amount that is owed. Homes, cars, boats, other property, and money in your account are all going to be fair game when it comes to an IRS levy, and you will want to do your best to avoid this kind of seizure. The following are a few things that you will want to learn about levies.
IRS Levy Process
First, it is important to understand that the IRS will only use Levies as a last resort. Before opening a levy, the IRS will send a notice that informs the individual about their tax debt, and this notice will outline some of the different payment options that are available. In addition, the notice should have a number that the taxpayer can call in order to learn more about installment payments, extensions and other ways to pay off their tax debt. This notice should be considered a first warning.
If the taxpayer ignores the first warning or does not pay the debt, they will then receive a notice that will notify them of the intent of the IRS to file a levy. This notice is going to be your final warning before a levy is placed on the account. Upon receiving this warning, you will have thirty days to appeal the levy or speak with the IRS in order to work out a way for repayment. If no appeal is successfully made, and no repayment is worked out, the levy will be placed and the IRS will then have the ability to seize your property or money.
Fighting a Levy
If a Levy is placed on your bank account, there will be some kinds of income that the IRS will not be able to seize. For example, if you are paying child support or receive social security or veterans benefits, the IRS will not be able to take these funds. When a levy is placed on your account, you will want to do your research and learn what restriction the IRS may have in your situation, and this kind of information can help you deal with your levy effectively.
It is important that people living with tax debt understand the IRS use of bank levies, as a levy is a very real tool that is used by the IRS fairly commonly. The best way to avoid these problems is to keep current with your taxes. If you do fall behind, contact the IRS and see what kinds of payment plans can be worked out, as these simple precautions will help you avoid larger problems.
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