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Tax levies and how to avoid them

If you owe the IRS money and you aren't able to keep up or schedule a payment plan, they may start the process of garnishing your wages or other property through an IRS levy. The IRS can seize your legal property to offset the money you owe them for your taxes. If you know the IRS plans to levy your property, you only have a short amount of time to reverse the process.

Actions before a levy

Before the IRS can begin to seize your property, they must meet three requirements. First, the tax must be assessed and the taxpayer must receive a tax bill, otherwise known as a Notice and Demand for Payment. Second, the taxpayer must refuse to pay the bill even after it is received. Finally, if you continue to refuse to pay your tax, you will receive a Final Notice of Intent to Levy and notice of a hearing at least 30 days before the levy is put in place. You may receive this notice at work, your home, in person, or by certified mail.

How to avoid a levy

The best way to avoid a levy is to file your tax returns each year on time and pay any taxes you owe when they are due. If you are unable to file or meet your tax payments by the scheduled dates, the IRS may offer an extension that allows you extra time. If the amount you owe is more than you can afford, the IRS may be willing to work with you if you make installment payments and set up arrangements to pay what is left of your balance.

The key to avoiding a levy is to be proactive with the IRS. If you owe tax debts that you are unable to pay, you may have several options that allow you to settle the debt. The IRS will often work with you to settle your debts for less than you owe or to set up a payment plan that allows you to make monthly payments until your balance is gone.

The IRS will typically enforce a levy when they have not heard from the taxpayer with any efforts to resolve the tax debt, despite repeated attempts to get in touch with them.

Get tax debts off your back

If you owe the IRS money and can't see a way out of paying it, an attorney may be able to help you settle for a lower amount with the IRS. Rather than having your property levied, it may be beneficial to explore your options with an attorney first.

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