Published On: Thu, Nov 21st, 2019

What is a Levy

Concerned about the consequences of tax debt? Optima Tax Relief reviews one of the key implications of falling out of compliance with debt obligations to the IRS – the possibility of losing your home.

Although the IRS offers many programs to help taxpayers manage their tax debt, millions of Americans are still struggling to pay their taxes every year. For those that fall out of compliance with their tax debt program, there are some significant consequences – including the possibility of losing your home. The experts at Optima Tax Relief reviews these potential consequences and pitfalls related to tax debt delinquency and non-compliance.

photo/Gerd Altmann

One of the ways the IRS can collect on your tax debt is by placing a levy on your home.  A levy is an actual legal seizure of your property, taken in order to satisfy the outstanding tax debt. The IRS can also place a levy on your car or your boat, in addition to your house.

 Before the IRS can seize your property, a number of requirements must first be made:

  • The IRS will assess the tax owed and communicate this to the taxpayer via a Notice and Demand for Payment.  
  • The taxpayer either neglects or refuses to pay the taxes owed
  • The IRS will then issue the delinquent taxpayer a Final Notice of Intent to Levy and a Notice of Your Right to A Hearing and must send this to the taxpayer a minimum of 30 days before the levy is put in place. </p>

A levy should not be confused with a lien, which will typically happen before the levy is put into effect. When a lien is filed, the result is a legal claim of your property without actual seizure of the property itself. This is the key distinction between a levy and a lien.

By taking a proactive approach to your tax debt, you can mitigate these extreme efforts by the IRS to collect a tax debt. The IRS offers several programs, including tax extensions as well as payment plans to aid the taxpayer in managing their tax debt. In some cases, the IRS will even work with the taxpayer to settle a tax debt for less than the full amount owed. If you think you may have an outstanding tax debt, you should contact the IRS or enlist the assistance of a tax resolution company like Optima Tax Relief.

Author: James Daniel

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