The IRS may issue a tax levy if you fail to pay any of your tax debt. Typically, you will receive a Notice of Intent to Levy
and if this is not complied with, the IRS will take action in the form
of a bank levy or wage garnishment. The three types of federal levies
most commonly used by the IRS are wage garnishments, bank levies and
federal or state payment levies.
Bank Account Levies
Your bank will first be notified from the IRS with a Notice of Intent to Levy. Your bank will then be legally obligated to freeze funds in all accounts: checking, savings, CDs, etc in the form of a bank levy. If your name is on an account, it will be frozen.
Funds will be held by your bank for 21 days, providing you a three week grace period to pay your back taxes. After the 21 days, the funds that are frozen in your bank account will be sent to the IRS as an IRS tax levy. These funds now belong to the IRS even if you try to remedy the situation by entering an offer in compromise after the money is gone.
IRS Wage Levy
An IRS wage levy is a continuing occurrence against your wages, as opposed to the bank levy which is a one-time freeze of funds in your bank account. This will continue until all your back taxes are paid off. Your employer will be notified via a Notice of Intent to Levy when the IRS decides to issue a wage levy, or wage garnishment. Your wages will then be garnished promptly from your next paycheck. This means the IRS will receive payment before you receive your own wages.
Wage garnishments are immediate. Once the IRS issues the notice they will begin with the wage levy.
State or Federal Payment Levies
The Federal Payment Levy Program is another means of satisfying the IRS in regards to your back taxes. The IRS will issue a tax levy on any payments that are owed to you, including Social Security benefits and Medicare payments.
The IRS may also issue a tax levy on your state tax refund through the State Income Tax Levy Program.
This is why if you have received a Notice of Intent to Levy from the IRS over your unpaid back taxes, you need to consult a tax professional. Jay Allen Finn, CPA is a former IRS Revenue Agent with an excellent track record in resolving tax levies. He has an A+ rating from the Better Business Bureau in Houston, Texas.
Bank Account Levies
Your bank will first be notified from the IRS with a Notice of Intent to Levy. Your bank will then be legally obligated to freeze funds in all accounts: checking, savings, CDs, etc in the form of a bank levy. If your name is on an account, it will be frozen.
Funds will be held by your bank for 21 days, providing you a three week grace period to pay your back taxes. After the 21 days, the funds that are frozen in your bank account will be sent to the IRS as an IRS tax levy. These funds now belong to the IRS even if you try to remedy the situation by entering an offer in compromise after the money is gone.
IRS Wage Levy
An IRS wage levy is a continuing occurrence against your wages, as opposed to the bank levy which is a one-time freeze of funds in your bank account. This will continue until all your back taxes are paid off. Your employer will be notified via a Notice of Intent to Levy when the IRS decides to issue a wage levy, or wage garnishment. Your wages will then be garnished promptly from your next paycheck. This means the IRS will receive payment before you receive your own wages.
Wage garnishments are immediate. Once the IRS issues the notice they will begin with the wage levy.
State or Federal Payment Levies
The Federal Payment Levy Program is another means of satisfying the IRS in regards to your back taxes. The IRS will issue a tax levy on any payments that are owed to you, including Social Security benefits and Medicare payments.
The IRS may also issue a tax levy on your state tax refund through the State Income Tax Levy Program.
This is why if you have received a Notice of Intent to Levy from the IRS over your unpaid back taxes, you need to consult a tax professional. Jay Allen Finn, CPA is a former IRS Revenue Agent with an excellent track record in resolving tax levies. He has an A+ rating from the Better Business Bureau in Houston, Texas.
No comments:
Post a Comment