Handling Tax Debts and IRS Levies
Levies of Personal and Real Property
A levy can be used to seize a Taxpayer's wages, commissions and other income, and other assets of the Taxpayer, including bank accounts, stocks, bonds, automobiles and Inividual Retirement Accounts. A levy can also be used to seize real estate, although as a general rule, the IRS does not seize personal residences. A levy is a legal seizure of your property to satisfy a tax debt. 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.
Procedure For Levy
Before the IRS will levy your property, three requirements must generally be met:
1. A tax has been assessed and a Notice and Demand for Payment has been sent to the Taxpayer.
2. The Taxpayer has not paid the tax.
3. A Final Notice of Intent to Levy and Notice of A Right to A Hearing was sent to the Taxpayer at least 30 days prior to the levy.
Options Prior To Levy
Prior to the expiration of the thirty day period after a Final Notice of Intent to Levy and Notice of A Right to A Hearing was sent to the Taxpayer, the Taxpayer or the Taxpayer's representative may ask an IRS manager to review the case, or the Taxpayer or the Taxpayer's representative may request a Collection Due Process (CDP) Hearing with the Office of Appeals by filing a request for a Collection Due Process (CDP) Hearing with the IRS office listed on the notice. Again, the request must be filed within 30 days of the date on the notice. At the conclusion of the hearing, the Office of Appeals will issue a determination. The Taxpayer has thirty days after the determination date to bring a suit to contest the determination.
Levies of Bank Accounts
When a bank account is levied, the bank must hold the funds the Taxpayer has on deposit, up to the amount the Taxpayer owes, for 21 days. The levy only applies to the funds that are actually on hand on the day the levy is made. It does not apply to deposits that are made after the date of the levy (unless an additional levy is made). After 21 days, the bank must send the money to the IRS.
Options After The Levy
If a Levy creates a hardship, for example, the Taxpayer cannot make a mortgage or rent payment as a result of the Levy, we may be able to assist by Filing a Request for a Taxpayer Assistance Order.
Get a Game Plan!
A well devised plan for discharging tax indebtedness is important and almost impossible to achieve without the help of an experienced professional who understands the process or various processes that may be involved, what is possible and what is not, and the full range of remedies available. Remember, there are often multiple solutions to the settlement of a tax debt. As an attorney certified as a tax specialist, John Kachmarsky and the staff at the Law Office of John Kachmarsky have that experience and knowledge.
Contact our Charleston, South Carolina law office today to make an appointment for an initial telephone consultation.
