IRS Levy – Can the IRS Levy my Bank Accounts and Wages?
The short answer…Absolutely! It is hard to believe that taxpayers get notice after notice from the IRS demanding payment, but they just don’t believe anything will really happen. An IRS Levy notice is serious and you should take action immediately with a tax lawyer.
An IRS levy permits the legal seizure of your property to satisfy a tax debt. It can contact your employer ordering a wage garnishment, take money in your bank or other financial account (bank levy), take your state or federal tax refund and seize and sell your vehicle(s), real estate and other personal property.
When you owe a tax debt to the IRS and you do not pay the amount in full, collection notices generally come in this order, about five weeks apart:
- CP-14 Balance Due Notice
- CP-501 Reminder Notice of Balance Due
- CP-503 Reminder Notice of Balance Due
- LT16 You have overdue taxes and /or an overdue tax return
- CP-504 Intent to Levy Notice
- LT-11, CP-90, CP-1058 Final Notice of Intent to Levy Notice
It’s serious: Final Notice of Intent to Levy
The one to obviously worry about is the Final Notice. If you do not receive this letter and the IRS levies your bank account or garnishes your wages, you have recourse against them to stop these collections. Many times, taxpayers do not open their mail or just plain forget that they received this particular letter.
To ensure that this Final Notice went out (justifying the IRS collection activity), it is important to contact the IRS to get a transcript for the year(s) that you owe tax debt. This transcript will show, among other things, whether a Final Notice was mailed out and the date. If this Final Notice was not sent, it is then best to file a Collection Due Process Appeal to stop the levy action.
How do I avoid an IRS levy after I receive a Final Notice
The key is to be proactive and do not ignore these IRS collection notices.
It is probably best to contact a tax attorney when it’s gone this far. Generally, you can avoid a levy by getting into tax compliance: filing returns on time and paying your taxes when due.
If you just do not know what to do, immediately call the IRS at the number at the top of the notice. If you lost the notice, call the IRS at 1-800-829-1040 for individuals and 1-800-829-4933 for businesses.
When you speak with the IRS, see if you can get more time to file if you have unfiled tax returns. If you need more time and have more returns to do, call and request it. As long as they see that you are working toward resolving the situation, they will be compromising. If you get more time and do nothing, they will deny you any more time and will move forward with collections.
Once you have filed all missing tax returns and if you agree that you owe the tax debt assessed, you may stop collection activity with these following tax resolution options:
- Installment Agreement (IA)
- Partial Payment Installment Agreement (PPIA)
- Offer in Compromise (OIC)
- Currently Not Collectible (CNC)
Taxpayers needing assistance in dealing with an offer in compromise and IRS tax problems should seek the advice of a knowledgeable tax attorney. The Los Angeles Tax Attorneys at Delia Law have many years of tax resolution experience and will competently represent you before the IRS. Please call for a no-cost tax attorney consultation for tax resolution at (310) 494-0100. We look forward to helping you.
This blog post is not intended as legal advice and should be considered general information only.
Keywords: IRS levy, IRS bank levy, IRS wage garnishment, IRS Tax debt