What is the difference between a Tax Lien and a Tax Levy?
A tax lien is a claim against any one of a taxpayer's assets when the taxpayer has not paid, or made arrangements to pay, a tax debt. The lien gives the IRS or state tax agency that issues it priority over other creditors with respect to the identified property. A tax levy, on the other hand, is the actual seizure of a taxpayer's property, issued only when all previous attempts to collect a tax debt have been ignored.
When is a Tax Levy issued?
An IRS Notice of Intent to Levy is issued when there is an existing tax debt and no tax settlement arrangements have been made. It is usually one of the last steps in the enforced collection process by the IRS or state tax agency and is only used when other collection activities have failed.
What types of property can the IRS Levy?
The IRS can seize a house, car, boat or any other asset held by a taxpayer. They can also levy bank accounts, retirement accounts, rental income, dividends, wages, life insurance policies or numerous other types of assets that may be the property of the taxpayer but held by someone else.
What are the steps in the IRS Tax Levy Process?
Before issuing a tax levy, the IRS assesses the amount of the delinquent tax and sends the taxpayer a Notice and Demand for Payment. If the delinquent taxpayer fails to respond to this communication, the IRS will then issue a Final Notice of Intent to Levy as well as an official notice informing them of their right to a hearing. Once these official notices have been issued, the IRS can seize the assets in question without further advance notification.
What steps should you take if you receive a Notice of Intent to Levy?
Probably the most effective way for a taxpayer to respond to any type of enforced collection activity by the IRS is to enlist the help of a tax professional. An individual with the proper qualifications and experience will have a thorough understanding of tax law and can often negotiate with the IRS on a taxpayer's behalf to stop impending collection action. In some cases, after reviewing or filing past returns, a qualified tax professional will be able to reduce the tax liability that resulted in the collection action or eliminate it altogether.
If you are the subject of a tax lien, a tax levy, a wage garnishment or any other type of IRS collection activity, we can help you resolve your problem. For more information about our tax debt resolution services, visit us today at http://www.professionaltaxresolution.com/. With over 16 years of experience, we have a thorough understanding of tax law together with the experience to know which tax settlement option will best fit with your specific set of circumstances. Contact us by phone at (877) 889-6527 or by email at info@protaxres.com to receive a free, no obligation consultation.
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