Understanding The IRS Tax Levy
If you owe money to the IRS, you should do whatever you can to avoid a tax levy. Sometimes, however, circumstances prevent individuals from being able to pay their tax debt or make sufficient payment arrangements. When this happens, the IRS will levy or seize assets that may include real estate, automobiles, boats, bank accounts and more.
A levy is typically the last step in the IRS debt collection process. If you receive a notice to levy, it is important to take the necessary steps to protect your property and your assets. This is typically the step that you can no longer ignore.
You may be eligible to qualify for what the IRS calls an offer in compromise. Essentially, this is an agreement between you and the IRS. Certain circumstances have to be established before the IRS will accept this offer, however. These include: actual presence of tax liability, inability of taxpayer to pay off debt in full, and evidence of extreme economic hardship.
Some benefits of an OIC include the opportunity to avoid bankruptcy, and the release of liens and levies by the IRS. Taxpayers are required to remain current on all tax obligations for five years, and must waive their rights to certain tax benefits. There are other applicable conditions as well.
Tax levies are serious and can carry severe penalties and consequences. If you are experiencing tax problems, dont wait until it is too late. Contact a tax professional today. You do have options and the longer you wait the less they are.