Lien and Levy Removal
Dealing with the Internal Revenue Service (IRS) can leave many people and businesses pulling themselves up by their bootstraps when it’s that time of the year. More importantly, when you’re in default with the IRS and you owe them money, understanding their terms and penalties will help you get a grasp of how the IRS works.
What is an IRS Lien?
An IRS lien is a public notification filed with the county clerk’s office stating that you owe the IRS money. A lien doesn’t serve to have any money taken away from you, but can be difficult when you’re trying to enter into other financial transactions. For example, if you attempt to sell your home, the IRS lien will show up on your title and must be resolved prior to selling your home.
So What is an IRS Levy?
On the other hand, an IRS levy serves to have money taken from you without your permission. A levy can be issued against your bank account or even your employer. If you’re a business, the IRS can also send levy notices to your customers. In fact, a levy can result in customers paying the IRS instead of paying you. The IRS will often times use a levy as a last resort collection method and a levy can be quit heavy-handed.
More importantly, the response time on a levy can be time sensitive and have huge penalties if you fail to respond. Here’s what you need to know about the time penalties:
IRS Lien & Levy Penalties
1-3 Months: Notices Begin To Arrive
You will get a letter informing you that you have an outstanding balance with the IRS.
2-6 Months: Tax Liens & Possible Collection Calls
A tax lien can occur as soon as your taxes are assessed or take a few months. In fact, even if the lien does not show up on your credit, it can hinder your security clearance, prevent you from getting loans, or prevent your from getting jobs.
3+ Months: What To Expect
At this point, your tax debt can have serious consequences that include passport restrictions, seizing your assets, bank account, social security payments, or your paychecks. The action is swift, but it usually takes a while to get to this point. They’ll even take your car and sell it to an auction and take the money to pay your back taxes. They can go after your homestead, IRA, and 401K, and assets a collection agency doesn’t have privy too.
Unfortunately, down the road if the IRS does decide to collect, none of your assets are shielded.
How to Prevent This From Happening in the First Place
It’s obvious that the best way to avoid a tax lien or levy is to pay your taxes on time. However, at TaxLane we understand things to happen and we’re there to help.
Often times, the IRS will offer a payment plan that will help you pay your back taxes. If you can’t afford your tax bill, a payment plan is the best option to stay current with the IRS. Enrolling in a payment plan shows that you’re making an effort and can help you avoid a tax levy. Ask TaxLane about what payment plan options are best for your unique situation.
To avoid the same issue arising next year, make sure you’re withholding enough taxes to cover what you owe the IRS. If you need help with calculating what you owe, we can help..
More importantly, avoid playing with fire. The IRS will catch up with you eventually and most certainly come to collect what’s owed to them. The longer you wait to resolve the matter, the harder it is to resolve.
How to Get a Tax Levy Removed
As soon as you receive a notice with “notice of intent to lien” or “notice of intent to levy” it’s important to take action right away.
A professional tax representative has experience with the IRS rules and regulations and can resolve the matter in your best interests. At TaxLane, we provide nationwide tax representation. We’ll provide a tax levy removal solution that will improve the quality of your life and get you back to normalcy as soon as possible. Our professionals provide you with an honest opinion on how to resolve your tax issues that are backed by experience and knowledge. In fact, we will provide transparent fees in relation to what we can do for you.
Contact us to discuss your tax lien or levy today and let us navigate the difficult tax rules and regulations to help you get the relief you’re entitled to.