Your bank accounts, salary, and properties can be seized by the IRS through an IRS levy. As many of these assets as required will be taken to cover your tax liability. If you have gotten notice of an IRS levy, your IRS problems have finally caught up with you.
Paying your taxes fully, as well as accrued penalties and interest that’s increasing every day, will get the IRS to leave you alone. The sooner you pay it all off, the less likelihood that it will get out of hand.
If you can’t pay your tax liability, there are options to get the IRS to cancel a levy:
- The statute of limitations expires before the levy is received
- The IRS is convinced that cancellation of the levy will help them get the tax
- An installment agreement is met
- Financial hardship will be caused by the levy
- Part of the assets will be released if the assets taken is more than the taxes you owe
- Filing for bankruptcy
- Submission of an offer in compromise
Before an IRS levy is served, you can stop your assets from being seized. Do not try one of the following if you think that you’re breaking the law:
- Transfer of assets: under some circumstances, you may sell or give away properties
- Proof that the levy is not economically feasible: if it will cost the IRS more to obtain, keep, and sell the asset than it’s worth
- Asset is essential for you to work: you cannot do your job or get to work without the asset
- Keep the existence and locations of assets a secret: for properties located outside the state, country, etc.
- Keep movable assets away from home or business premises: cars, boats, other vehicles
- Move bank accounts: a move of self-protection
- Rent, do not own your assets: can’t seize what you don’t own
- Put money in retirement accounts: discouraged from taking these
- Use safety deposit boxes: they’ll have a hard time finding these
You have to be effective in dealing with your IRS issues. Do not let it ruin your life. Avoid IRS levies, when able.