Took my Chevy to the levy but… okay, not that kind of levee. I’m talking about an IRS levy, which is very different.
There’s a saying out there– hope for the best but prepare for the worst. Honestly, that ought to be our slogan here at LEK Management Inc, because when it comes to tax resolution, we often have to deal with the worst.
And here’s one of the worst of the worst…
If you’ve gotten to the point in your tax debt where the IRS starts coming after your money, there are a whole lot of steps that you probably should have taken to resolve your conflict with them sooner.
But we’re not here to talk about what should have been done differently. We’re here to talk about what you’ll need to do next.
For starters, let’s just make sure you’re clear on what exactly a notice of levy is. In simple terms, it’s the IRS equivalent of “We’re coming to take your money, whether you like it or not.” In *slightly* more technical terms, it is a legal action taken by the IRS to collect your unpaid taxes.
They can seize your wages, bank accounts, or even your Mount Vernon property to satisfy your tax debt. It’s a serious matter, and it’s important to understand the implications.
The good news about an IRS levy is that they don’t just show up one day unannounced and start taking your stuff. By the time they come to your door, they’ve sent out FIVE separate letters in succession to resolve your conflict.
It may feel like a sudden thing, but the IRS actually gives you plenty of time to fix things before they take drastic action. You will definitely want to keep an eye out for one of these five notices showing up in your mailbox…
- CP14: Notice of unpaid taxes
- CP501: Reminder of unpaid taxes
- CP503: Second reminder of unpaid taxes
- CP504: Notice of Intent to Levy
- Letter 1058 or LT11: Final Notice. Notice of Intent to Levy and Notice of Your Right to a Hearing
The Final Notice is crucial—although it’s not necessarily the proverbial final nail in your coffin. It’s primarily the last warning before the IRS seizes your assets.
While you should carefully review every notice you get from Uncle Sam, you’ll definitely need to carefully review that one so you know the collection date and the details of your right to appeal.
Once the final notice is received, you have 30 days to make an appeal. If you get to the 30-day point without responding, the IRS will only wait 10 days before listing your Westchester County property for sale.
Let’s say you somehow miss all 4 of the other notices, and you make it all the way to the final notice. What now? First of all, you do still have basic rights as a taxpayer. You always have the right to appeal a levy and request a hearing before the levy actually takes effect.
Here are a few simple steps you can take to help prevent an IRS levy and lost wages, property, or other assets you love:
- Read the notice carefully. This might seem obvious, but it’s important to be sure it’s actually the Final Notice and note the collection date.
- Understand the collection date. This is the deadline to take action before the IRS seizes your assets, and it’s important to put it on your calendar so that you know your timeline.
- File an appeal. Doing this puts a hold on collection activities and gives you time to explore options. (We can help with that.)
And speaking of options, here are a few we can take a look at with regards to paying what you owe…
- Full-Pay Installment Agreement: Pay the debt in full over time.
- Partial Payment Installment Agreement: Pay a portion of the debt over time.
- Currently Not Collectible Status: If you simply can’t afford to pay, the IRS may temporarily suspend collection.
- Offer in Compromise: Negotiate to settle the debt for less than the full amount.
- Abatement of Penalties: Request a reduction or elimination of penalties.
Navigating IRS tax debt can be complex, but hopefully, this helps it seem a little more straightforward. We specialize in speaking IRS-ese, and can always help you understand your obligations, explore options for resolving your tax levy, and protect your financial interests.
So go ahead and give us a call when you’re ready.
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Helping you keep your Chevy and avoid a levy,
Lynn Karam