Norwalk, CT: Did the IRS Just Empty Your Bank Account? Read This.

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Education & Training with By The Book Taxes 00114257-EA

FEDERAL TAX LEVIES

 

 

It’s an awful feeling to go to the ATM, attempt to withdraw cash and get a message that there are zero dollars in your account. You contact the bank and are told that the IRS “levied” your account. A levy is a taking or seizure of your property in order to resolve tax debts.

 

My firm, By The Book Taxes, located in Norwalk, CT specializes in income tax preparation for individuals, families and self-employed people. By the Book Taxes also helps clients resolve their tax debts by preparing and filing Installment Payment Agreements, Offers-in-Compromise, Currently Not Collectible and Innocent or Injured Spouse applications.

 

Over the next few weeks I will explain how IRS levies work. A levy occurs when a taxpayer has been unresponsive to the IRS’ attempt to collect tax debts owed. Before discussing levies it is important to understand how the IRS collection process works.

 

The IRS collection process works as follows:

  •          You file a tax return and if there is a balance due the tax is “assessed”
  •          You receive a billing notice asking you to pay the balance within ten (10) days
  •          If payment is not received, a “silent” lien arises which means you aren’t notified
  •          You receive an escalating series of more threatening collection letters resulting in a
  •          Threat to levy (take) your assets
  •          If you owe > $10,000 the IRS will issue a “Notice of Federal Tax Lien” (NTFL) which attaches to your assets and destroys your credit rating
  •          If you continue to ignore the IRS, levies will commence

 

 

Hopefully, you are never in this predicament. If you are, contact a tax professional who does tax resolution work immediately.

 

There are three (3) types of levies that taxpayers need to be aware of. They are:

  1.       Regular – cleaning out your bank account or attaching payments from clients
  2.       Continuing – taking a chunk out of your paycheck every payday
  3.       Retirement Accounts – IRA/401k/Social Security – If you can access it, so can the IRS

 

Over the next few weeks I will go into each of these options in detail and explain how to avoid or deal with a federal tax levy.

 

If you have years of unfiled tax returns or owe money to the IRS, please call me. I can help.

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Michael O'Leary, Enrolled Agent

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