100+ Years of Combined Tax Resolution Experience.
For the next few weeks, we’re running a “Slice of Life” series where we address real-life problems our clients bring us after they’ve filed their taxes (or not). You can read Part 1 – Slice of Life: I’ve Been Scammed!, Part 2 – Slice of Life: I Hate Filing Quarterly, Part 3 – Slice of Life: I’m Running Scared and Part 4 – Slice of Life: I’m Confused of the series.
SLICE OF LIFE #5: A client calls us and says, “If I hire your office, can I get out of a bank or wage levy?”
Well, that depends.
When the IRS levies your bank account or wages, it literally seizes your assets and applies them towards your tax debt. The IRS won’t do this without warning. You’ll receive several notices in writing, followed by a 21-day grace period. If you haven’t taken steps to pay your debt or get the levy released by that point, there’s very little that anyone can do.
This is why you should call us as soon as you receive the first letter. The more time we have, the more we can help.
A levy is typically the second, more serious collections step the IRS will take (after a lien) if you’ve been unresponsive in setting up a payment plan for back taxes. To learn more about the difference between a levy and a lien, you can check out our earlier post here.
The IRS can levy any of your assets that are currently in someone else’s possession – bank or retirement accounts, joint accounts with family members, investments, or accounts receivable. (The 21-day holding period doesn’t apply to outstanding invoices, by the way – the client is required to send the money to the IRS right away.) If your SSN is attached to the account, it’s fair game for a levy.
Here’s the timeline for a levy:
Again, the more time we have, the more we can do to get the levy released! We can work to set up a payment plan, to make an Offer in Compromise, or to get the debt moved to Currently Not Collectible status. As long as you are actively working with the IRS to resolve the debt, that’s all they want, really.
Don’t panic! But don’t delay, either. If you have levy problems, give us a call at 844-841-9857, or schedule a free consultation here.
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