Tax Levy

The tax industry has its own vernacular, which can be confusing for the average taxpayer. With terms like wage garnishment, liens, and levies floating around, it can be hard to determine exactly what your issue is and what can be done about it.

What is a Tax Levy?

A tax levy is a legal action by the IRS to seize a taxpayer’s assets in order to settle an unpaid tax debt. It is considered one of the most aggressive collection methods the IRS can take, and it often comes after a series of warnings and notices.

If you ignore a Notice and Demand for Payment, the IRS will escalate the process and issue a Final Notice of Intent to Levy and a Notice of Your Right to a Hearing. You will have at least 30 days after this notice to act before the levy starts.

Tax levies come in several forms, and they can affect many of your financial assets:

1. Bank Levy: The IRS instructs your bank to freeze your accounts, and after 21 days, they can take the funds to cover the debt. This process can continue until the balance is fully paid.

2. Property Seizure: The IRS can seize your assets, including real estate or vehicles, and sell them to cover your debt.

3. Wage Garnishment: The IRS can garnish a portion of your wages directly from your employer.

4. 1099 Payments, Retirement Accounts, and Life Insurance Seizures: Tax levies can also extend to 1099 income, retirement accounts, and life insurance payouts.

5. Passport Revocation: In some cases, the IRS can also revoke your passport as part of a tax levy process.

How to Resolve a Tax Levy

Once a tax levy is imposed, it can be extremely difficult to reverse, but there are options:

1. Pay the Debt in Full: The IRS will remove the levy once the full tax debt is paid off, but this may not be feasible for most taxpayers.

2. Payment Plan: If you can't pay in full, you can set up a payment arrangement with the IRS.

3. Prove Financial Hardship: If paying the tax debt would cause undue hardship, you may be able to prove it to the IRS and have the levy lifted.

4. Filing an Appeal: You can appeal the IRS’s decision to levy your assets, potentially halting or delaying the action.

5. Offer in Compromise (OIC): In rare cases, you can settle your tax debt for less than what you owe through an OIC.

How FreshStartTaxRelief Can Help

Dealing with a tax levy is overwhelming, but FreshStartTaxRelief is here to help. We partner with tax professionals who have years of experience negotiating with the IRS to resolve tax levies and reduce tax debt.

Our experts will guide you through the process, ensuring that all necessary forms are filled out correctly and that the best course of action is taken. With the right assistance, you can remove a tax levy and pursue tax relief solutions.

Ready for a Fresh Start?

If you’re facing a tax levy, it’s important to take action right away to protect your financial future. At FreshStartTaxRelief, we make it easy to see if you qualify for relief and help you connect with the top tax relief firms in the country.

Click below to see if you qualify for the Fresh Start Program and begin your journey towards financial freedom today!

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