Getting an IRS levy notice can be alarming, it means the IRS is getting ready to take money directly from your paycheck, bank account and even other assets to cover unpaid taxes. By the time you get this letter, the IRS has already sent you multiple warnings. Means you are just steps away from enforced collection. If you act immediately you can stop the levy, protect your money and solve out a solution with the IRS. While the situation is serious, it’s not hopeless. In this article, we will discuss the steps you should take right away so you can resolve your tax debt and avoid further financial damage.
Don’t Ignore the Notice
If you have received an IRS levy notice, don’t push it to the side once it’s in your hands. Usually you have about 30 days before the IRS can start taking money directly from your paycheck, bank account and other assets. Ignoring it will only make things worse, leading to frozen bank accounts and other assets. Acting as quickly can resolve the issue smoothly and deal with serious financial troubles.
Carefully Read the Notice
When you receive the IRS notice, you have to read the notice carefully. It will tell you exactly how much the IRS says you owe, which tax years are involved and how they plan to collect whether that’s taking money from your wages, freezing your bank account or other assets. Check the details to make sure it’s right. Sometimes the amount includes extra penalties or interest you weren’t expecting and in some cases there could be a mistake. Understanding exactly what’s in the notice that will help you figure out the next step. To avoid errors that could cost you more, be sure to review the “10 Common Mistakes to Avoid in Tax Representation“.
Understand Your Rights
Getting an IRS levy notice doesn’t mean the IRS can just take your money without question, you still have legal rights. You can request a collection Due Process (CDP) hearing within 30 days, which can pause the levy while your case is reviewed. You can also appeal if you think the IRS made a mistake and if the levy would cause serious financial trouble. Knowing your rights gives you a real chance to protect your money and work out a better solution.
Contact the IRS Immediately
Once you get a levy notice, pick up the phone and call the IRS using the number listed on the letter. The quickly you reach out, the better your chances of stopping the levy before it hits your paycheck and bank account. If you can show them that you are serious about resolving the debt whether by setting up payments and proving there’s been a mistake they are more likely to work with you. Acting quickly shows you are serious about fixing the problem and can help you avoid a lot of unnecessary stress.
Explore Your Resolution Options
The best option depends on your finances, but the important thing is to act quickly. It’s time to figure out how to deal with it and you have few options to choose from.
- Paying the full amount can stop the levy right away if you can cover the whole amount.
- Setting up a payment plan can break the balance over monthly installments.
- Submit an offer in compromise can settle your tax for less than you owe if you qualify.
- Currently not collectible status can pause collections if you will prove that you can’t pay right now.
File Any Missing Tax Returns
If you have not filed all your tax returns, the IRS will not fully work with you and resolve your debt until you are caught up. Even if you can’t pay everything right now, filing shows you are taking steps in the right direction. Getting your returns up to date is an important step toward stopping the levy and fixing the problem.
Seek Professional Help
Dealing with IRS levy notices can be so stressful and one wrong step can create things difficult. A tax professional can deal with the IRS for you and work out payment arrangements or make sure your rights are protected. They understand the system and work best according to your situation. Getting professional help is one of the smartest moves you can make.
Keep All Communication and Documentation
When you deal with the IRS, keep a record of everything like letters, notices, forms, emails and call records. These records can be a lifesaver if there’s ever a mix-up and if you need to show proof of what was agreed on if there’s ever a dispute. If you organize each and everything it can save you a lot of headaches and make the process much easier.
Conclusion
This article guides the steps and helps you whenever you receive an IRS levy notice. An IRS levy notice is serious, but it does not mean you are out of the option. You have few options and steps but you just need to act fast. Taking the right steps can protect your money and help you move forward with a clear path.
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FAQ’s
Q: Can I stop an IRS levy once it starts?
A: Yes, you can stop an IRS levy after it starts by quickly arranging payments and correcting errors with the IRS.
Q: Will the IRS take all my money?
A: No, the IRS will not take all your money.
Q: Does an IRS levy affect my credit score?
A: No, the IRS levy does not affect your credit score.
Q: What happens if I ignore the levy notice?
A: If you ignore the levy notice, the IRS can seize your bank account and other assets.
Q: Can the IRS take my retirement account?
A: Yes, the IRS can take a certain amount of money from a retirement account.