When it comes to taxes, the Internal Revenue Service (IRS) takes them seriously. The IRS can enforce collection methods to ensure taxes are paid, such as levying a taxpayer’s property or wages. One such method is the IRS tax levy, the legal seizure of taxpayers’ assets to satisfy a tax debt.
The question is, can the IRS issue a tax levy without notice? This blog will provide an overview of tax levies without notice and explain the answer.
Overview of IRS Tax Levy
A tax levy is the legal seizure of a taxpayer’s assets to satisfy a tax debt. It is usually the last step the IRS takes to collect unpaid taxes. Before the IRS can levy a taxpayer’s property or wages, it must provide the taxpayer with a notice and demand for payment. This notice informs the taxpayer that they owe taxes, including the amount and type of taxes due. It provides them with a period to pay or make arrangements to pay.
If the taxpayer fails to take action, the IRS will issue a Final Notice of Intent to Levy and a Notice of Your Right to a Hearing. This notice is generally sent 30 days before the levy is issued.
Can the IRS Tax Levy Be Issued Without Notice?
No, the IRS cannot issue a tax levy without due notice. The IRS must provide the taxpayer with a message and demand for payment before it can levy the taxpayer’s assets or wages. The IRS must also give the taxpayer a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days before the levy is issued. This notice allows the taxpayer to take action before the levy is issued.
When Can the IRS Levy Without Notice?
The IRS is legally obligated to notify taxpayers of a levy before it is issued. However, there are certain situations in which the IRS can levy without advance notice. These situations include the following:
- The IRS has reason to believe the taxpayer is concealing assets or properties.
- The taxpayer failed to respond to a “Final Notice of Intent to Levy” sent to the taxpayer or their representative.
- The taxpayer has taken action to avoid or delay the payment of the tax debt.
- The taxpayer has previously been subject to a levy.
What Is a Final Notice of Intent to Levy?
The IRS sends the Final Notice of Intent to Levy to taxpayers who are delinquent in paying their taxes. It is a legal warning that the IRS will begin levying the taxpayer’s assets to satisfy the tax debt. The notice is typically sent after the taxpayer has failed to respond to an earlier notice or contact from the IRS.
Possible Alternatives to IRS Tax Levies
The IRS offers alternatives to tax levies to help taxpayers pay their taxes. These alternatives include installment agreements, offers in compromise, and currently not collectible status. Installment agreements allow taxpayers to pay their tax debt in monthly payments.
In contrast, offers in compromise allow taxpayers to settle their tax debt for less than the full amount owed. Not collectible status allows taxpayers to delay paying their taxes until their financial situation improves temporarily.
What to Do If You Receive an IRS Tax Levy
If you receive an IRS tax levy, you should take immediate action. You should contact the IRS to discuss your options and explore alternatives to the levy. You can also dispute the levy if you believe it was issued in error. If you do not take action, the IRS will proceed with the levy, which could result in your property or wages being seized to pay your tax debt.
How Can I Avoid a Tax Levy?
The best way to avoid a tax levy is to contact the IRS or a tax professional when you realize you’re facing a tax debt issue. This will allow you to discuss payment options and possibly negotiate a payment plan with the IRS. Additionally, suppose you’re facing financial hardship. In that case, you may qualify for an Offer in Compromise, a settlement allowing taxpayers to pay less than the full amount of their tax debt.
What Should I Do if I Receive a Final Notice of Intent to Levy?
You must take immediate action if you receive a Final Notice of Intent to Levy. You should contact the IRS or a tax professional to discuss your payment options and try to negotiate a payment plan or other resolution. If you don’t respond to the notice, the IRS can proceed with the levy and seize your assets to satisfy the tax debt.