Collection of tax debt is a long process that can stretch for years. If you have unpaid taxes, then the IRS will sooner or later discover it. When they do, they will send you a notice for its payment. The initial notices for the payment of tax debt will have information about how the tax debt was incurred and how you can pay it (the IRS will encourage full payment or payment through installments).
If these initial notices for the payment of unpaid taxes are ignored or if satisfactory efforts are not made to resolve the tax debt through full payment or qualifying for a payment plan, the IRS then moves to lien and levy.
Before placing a levy, the IRS sends the last notice to inform the taxpayer that the IRS will place a levy after 30 days if no resolution efforts are made. This notice Final Notice of Intent to Levy and Your Right to a Hearing is your last chance to avoid a levy. A levy can be placed on property, assets, bank accounts, wages, dividends, rental income, commissions, etc. Once a levy has been placed, it can upset the financial stability of a taxpayer, especially if early efforts are not made to get it released.
The IRS releases a levy if the entire tax debt is paid in full, if the taxpayer can show the levy causes severe hardship, if the 10 year statute of limitations is fulfilled, or if a resolution guarantees the IRS payment of tax debt. Negotiations with the IRS regarding the payment of the tax debt can help in the release of levy.
Even if you have been avoiding the payment of tax debt, after receiving the notice of the intent to levy, you should make immediate efforts to resolve the case. After the 30-day waiting period, the IRS can place a levy at anytime. Avoidance makes the IRS use harsh collection actions that can lead to financial difficulties.
Labels: Back Taxes, IRS, IRS Bank Levy, IRS Tax Lien, Tax Filing, Taxpayers