IRS Tax Levy Help

The tax is one thing that everybody hates to pay, no matter how small the amount may be. People tend to not pay the tax and often live in a constant fear of IRS getting to know about it. If one has not paid his taxes and is thinking what would happen, then he must remember one thing clearly and that is that IRS can really retaliate. Also, be sure that it would hit where it hurts the most.
Although IRS has many ways to punish a non taxpayer, one of the most feared one is an IRS tax levy. An IRS tax levy is a legal seizure of assets to satisfy a tax debt. It must be noted that the assets may be personal property, bank accounts, wages, services, dividends and any asset that is of value or that can fetch a considerable amount towards payment as tax debt. When an IRS tax levy is issued, it marks an outright seizure until the release or resale in order to recover the debt. The IRS can seize personal property or property that belongs to the defaulter but is currently held by someone else (for example wages, retirement accounts, dividends, bank accounts, licenses, rental income, accounts receivables, the cash loan value of your life insurance, or commissions).
The IRS tax levy system is a quite aggressive one and could bring a lot of hardships for the individual. However, it is not before a certain procedure and protocol is followed and the taxpayer fails to take appropriate steps that an IRS tax levy is issued. Firstly, IRS sends a “Notice and Demand for Payment” to the debtor. If the taxpayer does not respond or refuses to pay the tax, a “Final Notice of Intent to Levy” is sent to the defaulter. He is given a right to hearing against the levy and the procedure must be started within 30 days of receiving the letter of intent by filing a request to the specified levy officer. Then, depending on the nature of the debt and the ability of the defaulter to pay the tax in a specified amount of time, the various assets are levied.
The most common form of an IRS tax levy is seizure of bank accounts and redirection of funds to IRS. Here, the bank accounts are emptied and all payments are made to IRS accounts. The other common levies include seizure of right to shares and dividends. These are treated as ready cash and therefore, are the common forms of IRS tax levies. The less common forms include levies on personal payment, bank accounts, automobiles and acquiring rights to other assets.
A hearing against the IRS tax levy may be the only chance to avoid a levy. The defaulter can discuss many things including previous tax paying records, levy notices during bankruptcy (levy is automatically stayed during a bankruptcy), procedural errors etc. A discussion of various tax levy collection options, spousal defence or disputes on the levy can also be discussed. The defaulter can also ask for a settlement. The Office of Appeals issues a determination after the hearing. The determination may be contested in a law suit and your social relations may be asked to explain your socio-economic condition. There are 30 days given to contest the determination.
So, your assets were levied and you are having a tough time. So how can you get the IRS to end the levy? Well, IRS tax levies can be ended by a number of methods. Usually, when the defaulter reaches a repayment agreement with IRS, a levy is released. However, the agreement should reflect the original tax payment to be made. The defaulter may get the IRS to release the levy if the new agreement would successfully incorporate the tax payment as well as the interest. Also, apart from getting the IRS to release the levy, an IRS tax levy also end when the debt has been fully recovered or the legal time to collect the tax has ended.
The last thing worth noting is that if the defaulter, after a levy, feels that he has been dealt with partiality or has faced unaccounted damage during the levy, he can file for a reimbursement. There would be a hearing officer appointed and usually the case end within two to three hearings. The IRS may pay an interest depending on the magnitude of damage as well as the effect on the individual.
One must remember that an IRS tax levy is not the end of the world. Usually the tax levy ends automatically when the legal time to collect tax expires or the tax has been recovered. Also, the defaulter can take a stay on the levy by proving that he would not be able to meet the basic necessities of life after the levy. One just needs to get the correct strategy and legal help.