When Does the IRS Levy Your Assets?
An IRS Levy in Houston, TX is usually the last resort of a collection method that the IRS uses. While some of your assets might be protected, the IRS still has the ability to get most of them including your retirement accounts. They even have the power to seize control of your bank account. The IRS has many mechanisms for the taxpayer to get into compliance with the IRS regulations. If the taxpayer fails to understand the warnings and doesn’t take action to settle them, then the IRS will continue to use harsher ways until it finally escalates to a levy.
The IRS will levy after 3 basic requirements are met which include demanded payment where they will assess you with a tax amount that is owed through:
- A Demanded Payment: This is when they assess you with a tax amount that is owed through a letter that was sent to the last known address.
- No Payment: After you have received a notice, and you still did not pay your taxes.
- Final Notice: Once you have received a notice, you will be given 30 days to pay off your taxes. Otherwise, they can begin to levy your assets.
When the time comes and you still have not paid your taxes, then the IRS will continue with their levy. They mainly use three forms of levy which include:
- Bank Levy: This is the quickest and easiest way to seize money. The IRS will find the taxpayer’s funds in the bank account and put an immediate freeze to it. This way, the taxpayer will not be able to withdraw any money and it will remain frozen for 21 days until they seize the funds.
- Wage Garnishment: This is a form of levy where the IRS will contact the employer of the taxpayer and ask them to withhold their paycheck in order to pay the taxes that is owed. The employer will be held directly responsible for the money that needs to be collected.
- Asset Seizure: This is the last and least preferred method used by the IRS, however it needs to be used if there is simply no other way to get to the taxpayer. This is when the IRS can legally seize just about any asset including houses, cars, boats, and any other assets that they can sell to get the money owed.
As you can see, the IRS has plenty of power and can seize a wide range of income wages, and property. However, there are a few things that are protected from the IRS including minimum wages or income, unemployment benefits, worker’s compensation, income for court-ordered child support payments, annuity and pension payments, service-connected disability payments, tools for trade and business, furniture up to a certain value, and principal residence which will require the U.S. District Court judge’s approval.
If you end up receiving an IRS Levy in Houston, TX, it is important that you contact the IRS immediately or hire a professional who can handle the problem on your behalf. If you are in need of a reputable attorney, let Bobino Tax Consulting Services help you with your tax dilemmas. Atty. Bobino has an ample record of success since he is an experience and well-established tax advisor. For more information, contact him today at 832-483-2791.