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If you are behind on your taxes, are you afraid that the IRS may step in and levy your property in some way, without telling you? People sometimes fear that the government is simply going to show up on their doorstep, demanding their car, boat or other assets —- or cash -— in return for the taxes that are still owed.
The reality, though, is that this is not going to happen. The IRS actually tries to avoid using a levy as much as possible. It is a costly, time-consuming process, so they’d prefer to use other methods to get people to pay. For this reason, they are very up front about the whole process.
While there are cases of other types of communication, such as phone calls, most people still hear from the IRS by mail. This starts with a Notice and Demand for Payment. This is simply to let you know that you have not paid and that you have an outstanding debt. If you have paid and you get this, anyway, contact the IRS immediately to clear up the mistake.
If you haven’t paid and you continue not to, the IRS will then send you a Final Notice of Intent to Levy, and you will also get a Notice of Your Right to a Hearing. This happens 30 days before they would ever apply the levy. It basically lets you know that it is coming, giving you a chance to appeal it in court, to pay off the balance, to request a compromise that results in a low total payment, to set up a payment plan, or to take other action to resolve the issue.
Only after this, if you still do nothing, would the IRS put the levy in place. You will have plenty of notice beforehand, as long as the IRS has your proper address on file and you are receiving your mail. It is theoretically possible that the levy could be a surprise if you are, for some reason, deprived of your mail, but they will make every possible effort to contact you.
There are a few different types of levies that may be used. If you are worried about the IRS seizing your property, it is good to know that this is the type of levy they’ll use if they cannot obtain any capital. As mentioned above, they could take a car or a boat, for instance, which will then be sold to pay off that portion of the debt. A levy could even be used to take your home, or a second home or property, if you have one. Taking your home or primary car could be considered a hardship, though.
Another type of levy is also known as wage garnishment. This process involves getting the money directly from your paychecks, before they even get to you. Instead of demanding the money from you, the IRS is going to demand that your employer make partial payments on your behalf, out of your wages. The money will simply be extracted and sent to the IRS prior to your being paid.
If this is happening, or if it is looming, you need to know that you can be released from the levy if it is a hardship. The IRS recommends that you contact them by phone if it is. Classifying it as a hardship simply means that it is infringing on your basic rights by causing undo suffering to you and your family. If the wage garnishment means that you cannot buy food or pay your rent, for example, you may be able to have it lifted so that your family does not suffer. It is important to remember, though, that you still owe that money, even if you do end up being released from the levy.
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified tax lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact an attorney in your area from our directory to discuss your specific legal situation.