LEVIES & LIENS

What is the differnce between a Tax Levy and a Tax Lien?

A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a legal claim against property to secure payment of the tax debt, while a levy actually takes the property to satisfy the tax debt.

Where does IRS authority to levy originate?

An IRS levy permits the legal seizure of your property to satisfy a tax debt. It can garnish wages, take money in your bank or other financial account, seize and sell your vehicle(s), real estate and other personal property. ​If you receive an IRS bill titled Final Notice of Intent to Levy and Notice of Your Right to A Hearing, contact us right away. ​If you receive an IRS notice of levy against your employee, vendor, customer or other third party, it is important that you comply with the levy. 

What actions must the Internal Revenue Service take before a levy can be issued?

The Internal Revenue Code (IRC 6331) authorizes levies to collect delinquent tax. Any property or right to property that belongs to the taxpayer or on which there is a Federal tax lien can be levied, unless the IRC exempts the property from levy.

The IRS will usually levy only after these three requirements are met:

  • The IRS assessed the tax and sent you a Notice and Demand for Payment (a tax bill);

  • You neglected or refused to pay the tax; and

  • The IRS sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy. The IRS may give you this notice in person, leave it at your home or your usual place of business, or send it to your last known address by certified or registered mail, return receipt requested.

  • Please note: If the IRS levies your state tax refund, you may receive a Notice of Levy on Your State Tax Refund, 

When will the IRS issue a levy?

If you do not pay your taxes (or make arrangements to settle your debt), and the IRS determines that a levy is the next appropriate action, the IRS may levy any property or right to property you own or have an interest in. For instance, the IRS could levy property that is yours, but is held by someone else (such as your wages, retirement accounts, dividends, bank accounts, licenses, rental income, accounts receivables, the cash loan value of your life insurance, or commissions). Or, the IRS could seize and sell property that you hold (such as your car, boat or house).

How Do I Avoid A Levy?

You can avoid a levy by filing returns on time and paying your taxes when due. If you need more time to file, you can request an extension. If you can’t pay what you owe, you should pay as much as you can and work with the IRS to resolve the remaining balance. The key is to be proactive; so don’t ignore IRS billing notices.

We may be able to set up a payment plan, settle your tax debt for less than the full amount you owe, or there may be other options. There are several options for making tax payments. 

Bakersfield Tax Relief
Can Help You
  • Remove Wage Garnishments

  • Remove Bank Levies

  • Remove Property Liens

I would like a free 30 minute consultation to discuss

how to remove my tax levy or lien. Please contact me.

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All Rights Reserved   

Bakersfield Tax Relief

8700 Stockdale Highway

Bakersfield, CA 93311

(661) 232-0300

info@bakersfieldtaxrelief.com

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