What are IRS Seizures?
Levies are legal IRS seizures of property that are used to satisfy tax debts. Levies are different from liens. A lien is a claim used as security for the tax debt, while a levy actually takes the property to satisfy the tax debt. IRS seizures can be devastating.
If you do not pay your taxes (or make arrangements to settle your debt), the IRS may seize and sell any type of real or personal property that you own or have an interest in. IRS seizures allow the IRS to take anything they can get from you. For instance,
- The IRS could seize and sell property that you hold (such as your car, boat, or house), or
- The IRS could levy property that is yours but is held by someone else (such as your wages, retirement accounts, dividends, bank accounts, licenses, rental income, accounts receivables, the cash loan value of your life insurance, or commissions).
IRS seizures usually occur only after these three requirements are met:
- The IRS assessed the tax and sent you a Notice and Demand for Payment;
- You neglected or refused to pay the tax; and
- The IRS sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy. The IRS may give you this notice in person, leave it at your home or your usual place of business, or send it to your last known address by certified or registered mail, return receipt requested. Please note: if the IRS levies your state tax refund, you may receive a Notice of Levy on Your State Tax Refund, Notice of Your Right to Hearing after the levy.
If IRS seizures including a levy on your wages, bank account, or other property are causing a hardship, you should contact us immediately. We can prepare to explain your financial situation to the IRS.
We may ask an IRS manager to review your case, or we may request a Collection Due Process hearing with the Office of Appeals by filing a request for a Collection Due Process hearing with the IRS office listed on your notice. We must file your request within 30 days of the date on your notice. Some of the issues we may discuss regarding any IRS seizures include:
- You paid all you owed before the IRS sent the levy notice,
- The IRS assessed the tax and sent the levy notice when you were in bankruptcy, and subject to the automatic stay during bankruptcy,
- The IRS made a procedural error in an assessment,
- The time to collect the tax (called the statute of limitations) expired before the IRS sent the levy notice,
- You did not have an opportunity to dispute the assessed liability,
- You wish to discuss the collection options, or
- You wish to make a spousal defense.
At the conclusion of the hearing, the Office of Appeals will issue a determination.
IRS seizures are serious business. Get knowledgeable, experienced professionals to deal with these tax problems. Call us today!