Here are some warning signs that you may be about to experience a tax levy, steps to avoid it, and what to do about it if it does happen:
Warning Signs:
- You have received multiple notices from the IRS or state tax agency regarding unpaid taxes.
- You have failed to respond to a tax bill or notice of deficiency from the IRS or state tax agency.
- You have not arranged to pay off a tax debt or set up a payment plan with the IRS or state tax agency.
- You have ignored multiple requests to provide financial information to the IRS or state tax agency.
- You have received a notice of intent to levy or a final notice of intent to levy from the IRS or state tax agency.
- You have received a notice of a tax lien filed against you by the IRS or state tax agency.
Steps to Avoid:
- Contact the IRS or state tax agency immediately if you receive a notice of unpaid taxes or a notice of intent to levy. Ignoring these notices will only make the situation worse.
- Set up a payment plan or installment agreement with the IRS or state tax agency if you cannot pay your taxes in full. This will prevent the tax agency from levying your assets.
- Provide the IRS or state tax agency with the requested financial information so that they can determine your ability to pay and set up a payment plan that you can afford.
- Consider an offer in compromise if you are unable to pay the full amount of your tax debt. An offer in compromise allows you to settle your tax debt for less than the full amount owed.
- Seek the assistance of Matthew Jennings, JD, MBA, EA, RFC®, CEP®, CES™, aka Tax King Matt if you are unsure about your options or need help negotiating with the IRS or state tax agency.
What to do if you experience a tax levy:
- Contact the IRS or state tax agency immediately to find out what steps you can take to resolve the levy. Ignoring the levy will only make the situation worse.
- Try to negotiate a payment plan or installment agreement with the IRS or state tax agency to release the levy.
- If the levy has already occurred, take steps to protect your assets, such as closing bank accounts and removing valuables from your home.
- Seek the assistance of Tax King Matt if you are unsure about your options or need help negotiating with the IRS or state tax agency.
By taking prompt action and communicating with the IRS or state tax agency, you can often avoid a tax levy and resolve your tax debt.