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What Does IRS Intent to Levy Mean?

Friday, October 21, 2011
People who did not pay their federal taxes often receive an IRS Intent to Levy in the mail. The IRS sends this notice when they exhaust all their efforts to collect your overdue tax liabilities. This is the last step for the IRS before they levy your assets to pay your overdue taxes. For many taxpayers who do not pay their taxes, the IRS Intent to Levy gives them enough effort to pick up the phone and call the IRS. People who do not want to talk to the IRS after they receive the IRS Intent to Levy notice can call a tax attorney or tax advisor to help them. The IRS Intent to Levy needs your personal signature for you to receive the letter. This is so the IRS knows you received the letter. You have 30 days from the date the IRS Intent to Levy is sent for the IRS to levy your assets. Many times the IRS places a levy on your bank account. The levy freezes all the funds in your bank account(s) for 21 days, and then your financial institution sends them the money to pay off your tax debts. The IRS Intent to Levy notice needs to provide an explanation or reason for the levy, and list collection alternatives before the levy goes on your assets. Unbelievably, the IRS does not want to place a levy on your assets. They rather have you call them to find a payment solution so you get back in compliance with your taxes. Many people are scared to contact the IRS, because they hear horror stories about auditors and revenue officers. If you do not take any action after receiving the IRS Intent to Levy, the IRS will levy your assets to pay for your taxes. These are the following assets that IRS Intent to Levy can take from you: • Wage Garnishment • Retirement Benefits • Commissions • Bank accounts • Home or land • Contractor Payments • Anything else of value to the IRS You need to take action when you receive the IRS Intent to Levy. Your bank does not have the power to override the federal government when they need to collect for your overdue taxes. A tax attorney can help you stop the levy process. You can call the IRS to discuss payment arrangements if you do not have the money to pay your taxes in full. This stops the levy process, and your assets stay safe. Another option that you can choose when settling your tax liabilities is to file an offer in compromise. You will settle your taxes for a fraction of the entire amount to get yourself back in compliance. Once you receive the IRS Intent to Levy notice, a tax attorney can help you file the compromise. Filing an offer in compromise is a complicated process, and is easier for a tax attorney to file the papers for you. The IRS is usually willing to work out an installment agreement with you if you cannot afford to pay the full amount of your taxes. They like to work with people who voluntarily call them up about their tax situation, and will work out a payment plan with you. Once you set up a payment plan, they stop the levy on your assets. IRS Resources – Payroll taxes Do you need information regarding your payroll taxes? You can search Google locally and include bank levy in your keyword search. Taxpayers can look at this 2011 IRS table to figure out the amount that is exempt from your wages, and other incomes. The Circular E Employer’s Tax Guide, or IRS Publication 15, is also helpful. There is more information at the Beverly Hills Bar Association.