North Carolina Tax Lawyers
If you have received a “Notice of Intent to Levy” from the Internal Revenue Service (“IRS”), you are undoubtedly frustrated. You may be asking, what is a levy? What are the IRS’s levy options? How long do I have until the IRS levies on my property? How do you stop a tax levy? This article provides the framework for answering these questions and provides practical tips for dealing with an IRS levy.
What is a levy?
A tax levy is an administrative means of collecting outstanding tax liabilities by seizing or taking your property. The IRS makes millions of levies per year. A common example of a tax levy is when the IRS issues a bank levy to seize cash in your checking or savings accounts. The IRS may also levy on your wages through a process called “wage garnishment.” The IRS may potentially seize and sell your car, boat, or house.
A levy can be financially disastrous. Fortunately, if you have received a collection notice from the IRS, you have options to prevent the levy; however, it is very important to take immediate action.
Tax Levy Prerequisites and IRS Notices
By regulation, the IRS must meet certain requirements prior to a tax levy. The IRS must first make an assessment of the tax and send a Notice and Demand for Payment. Before your assets are levied, the IRS will send you a series of increasingly demanding notices. Individual taxpayers normally receive multiple notices prior to a levy.
Appeal to Avoid the Tax Levy
After you receive the Final Notice of Intent to Levy and Notice of Your Right to a Hearing, you have 30 days to file for a Collection Due Process (CDP) hearing. A CDP hearing is a formal hearing with a Settlement Officer in the IRS Appeals Division where you have the opportunity to appeal the collection division’s determination that the levy was appropriate under the circumstances.
At the CDP hearing, you or your representative will have the opportunity to argue for an installment agreement, offer in compromise, or another collection alternative in lieu of the levy.