tax levy

By: paulsimmions | Posted: 11th February 2011

The tax levy is the final and harshest collection mechanism of the IRS. The reason why it is so harsh is so it will scare people into paying their taxes before a levy goes into effect. The IRS will send out a final notice of intent to levy 30 days before they take action. In the letter they give the taxpayer their writes and ways they can rectify their situation. The IRS states the taxpayer can either pay in full or settle in some other way. Most people don't understand what settle in another way means. People can settle by entering into a payment agreement with the IRS, using an offer in compromise or appealing the levy.

Hopefully you never have to deal with a tax levy imposed by the IRS. Unfortunately, many people do have to face this reality every year. A tax levy is pretty simple to understand. This is a legal process in which your property is seized to satisfy tax debt. In other words, if you owe money to the IRS they can use the power of a tax levy to get it back by seizing your property. Don't get a tax levy confused with a lien. A lien is used as security for debt, whereas a levy is the actual process in which your property is seized.

What types of properties are in the line of fire when it comes to a tax levy? If you do not pay your taxes or owe money, the IRS can come after pretty much anything that will allow them to get what you owe. This includes but is not limited to your house, boat, and/or car. Property that is held by a third party is also subject to a tax levy. This can include: your paycheck, bank accounts, retirement accounts, life insurance cash value, and rental income among others. For more information please visit this website: http://www.levytax.net

A tax levy is the ultimate collection mechanism of the IRS. This is the IRS's forced collection mechanism where they will take your assets and sell them in order to fulfill your unpaid back taxes. Getting an IRS levy released means you typically need to come to an agreement with the IRS and they will agree to stop taking collection actions against you. Below are 10 ways you can legally release a tax levy with the IRS.

1. Pay the tax amount in full - This is the most common sense way of settling back taxes and getting a levy released. If you pay the tax amount owed in full, the IRS will immediately halt collection actions against you and the levy will be released.
2. Let the Statute of Limitations Expire - The IRS has 10 years to collect taxes from the initial date of assessment. Once the 10 year period is up, the IRS can no longer collect from you. Keep in mind that the IRS will try to extend this the statute of limitations on your case, so be aware of any papers they want you to sign. If you haven't paid the amount owed in 9 years, it is highly unlikely they will be able to collect from you in the last year.
3. Set up an installment agreement - An installment agreement is a payment plan with the IRS. This plan will allow you to pay off the tax amounts owed over time. It is important to may timely payments on this once it is in place or the IRS can re-enforce the tax levy.
4. Set up a partial payment agreement - This is similar to the installment agreement, but if you can show you can legitimately not make the payments required for an installment agreement, the IRS will allow for smaller payments that may equal less than the original amount of tax owed.
5. Offer in Compromise - If you meet the strict requirements for this type of relief, the IRS will release the levy. This is one of the hardest types of relief to receive from the IRS because it does allow you to "settle for pennies on the dollar".

For more information please visit this website: http://www.levytax.net
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Tags: third party, money, bank accounts, assets, insurance, paycheck, life insurance, offer in compromise, retirement accounts, tax debt, back taxes, notice of intent, tax levy, irs levy