A tax levy against your property gives the IRS or the state tax office the right to seize your property in order to collect back-taxes. You may receive a wage garnishment, a 1099 levy on your receipts if you are self-employed, a bank account levy, property (home, boat, car, etc.) seizure, and passport seizure to prevent you from leaving the country. The IRS can even levy your state tax refund, your retirement account and the cash value of your life insurance.
Best ways to solve your tax levy
Don’t stress! When you receive your Final Notice of Intent to Levy, you have 30 days to deal with the situation before the levy takes effect.
1. Request a hearing
The Final Notice of Intent to Levy reminds you that you have the right to a hearing which provides an opportunity to resolve your tax problems without a long and/or expensive court battle. You have to request the hearing within 30 days of receiving the final notice. If you do it in time, you will get a hearing and a chance to avoid a tax levy. Call us for an appointment so that we can come up with a strategy for stopping the levy.
2. Claim economic hardship
If a tax levy has caused you serious financial distress, and you can’t pay all your debts, apply to have the levy released. Call the number on the notice or Defense Tax Partners for assistance. You may end up with a reasonable payment plan or another solution to your tax levy.
3. Seek innocent spouse relief
If your tax levy arises from your spouse’s errors, you can apply for the Innocent Spouse Relief. You may be eligible if you prove that you were not aware of your spouse’s omissions. Then the tax office can release any tax levies on your property.