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Information about the Federal Tax Levy
By Darrin Mish of Law Offices of Darrin T. Mish, P.A.
Information about the Federal Tax Levy The government employs two primary procedures in collecting tax debts from the taxpayers, wage levies and bank account levies. When the IRS enforces any of these on you, it means that your funds and other forms of income are in jeopardy. The IRS has the right to levy your wages, including retirement income, social security benefits and other bonuses, if you incur substantial tax debts. In fact, the IRS is the sole entity that can garnish your paycheck without having to go to a trial. All they have to do is simply send your employer a notification and the latter is then immediately required to transfer a substantial amount of your paycheck to the IRS. Full payment of total taxes due and a levy release are your only options in ending wage garnishment. In the case of independent contractors and the self-employed, the IRS can actually, in fact obligate the clients to pay a certain amount of money to them. Although the contractors will still receive a certain amount of money, this is considerably less than the normal income they get from their clients. The IRS publication 1494 is a helpful resource regarding this matter. The second method, a bank account levy, allows the IRS to take all the money in any of your bank accounts. The banks will ultimately comply with the government so arguing with them would only make your efforts futile. However, only funds present in your bank account on the day the levy is received will be transferred to the IRS. For instance, if you deposit a check on Friday and the bank got a levy notice on Tuesday, only the amount present on Tuesday will be given to the IRS. It is only when another levy is issued that funds in your account from Wednesday to Friday can be transferred to the IRS. The law provides you with up to 21 days to convince the IRS to release the bank account levy. If you cannot get one within this prescribed period, the bank will immediately send your funds to the IRS. The amount of funds transferred to the IRS should be equal to the amount you owe but bigger amounts will be collected if there are succeeding bank account levies issued. Besides a wage levy or bank account levy, the government also has a several other methods that are less used but definitely just as efficient at collecting debt. The IRS can also levy personal assets like jewelry, your home, collectables, boat, insurance policies, ATVs, account receivables and even airplanes should circumstances call for it. With this, it is important to take note that any tax levy would indicate an IRS problem that simply does not go away unless dealt with squarely. The Federal tax levy is a serious issue no matter which way you look at it. Therefore, it is highly encouraged for anyone who has tax debts to settle them right away before the government enforces more serious collection methods like wage garnishment and bank account levies. Darrin T. Mish is a Nationally recognized Attorney whose practice focuses on representing clients across the United States with IRS Problems. He is AV rated by Martindale-Hubbel and is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. He has been honored by a listing in Martindale-Hubbel's Bar Register of Preeminent Lawyers. His passion is providing IRS help to taxpayers with both individual and payroll tax problems. He also spends a great deal of time traveling the nation providing training to attorneys, CPAs and Enrolled Agents on how to handle their toughest cases with the IRS. If you would like more information about his services please visit http://getirshelp.com. |
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