If You are Facing a Lien or Levy Because You Have a Debt with the IRS Babbitt Tax Law Can Help
Owe Back Taxes?
If you owe a debt to the IRS for past taxes remaining unpaid, they will make every effort to collect from you willingly. They will send notice after notice. If you do not respond with payment or arrange a payment plan, things can get ugly.
If you own property of any kind that is considered an asset it is free game for the IRS to use it as leverage against you in order to attain payment. They may come after your assets by placing either a lien or a levy.
The Difference Between a Lien and a Levy
Both forms of collection are waged against your property of value. When you fail to pay a tax, a lien is a claim registered against that property. A levy is heavier handed than a lien. Once a lien has been filed in the courts, a levy will then occur if that lien isn’t fulfilled within the documented assigned timeframe. A levy is a seizure by the government where your ownership falls away and the government now owns your property outright.
A Closer Look: What is a Lien?
A lien is a notification publicly from the IRS letting you know that they have established a legal claim against your property and that property is being used as collateral for the payment of a debt you owe. It is a very aggressive step in government debt collection. Liens are reported to all credit bureaus and can destroy your credit.
Once that property is sold at auction the IRS will take whatever they believe you owe, and you will get the remainder only. There is no negotiation.
You do not want a lien on your property, ever.
What is a Levy?
A levy is the red flag warning that a lien may be coming.
If a levy is waged the IRS believes you owe them money and they are set on getting it one way or another. The levy is what gives the creditor (the government in this case) the right to take your property in order to repay the debt.
A levy can be put on any of your assets including money and possessions that can be used to pay off the tax debt. In fact, your bank account could be frozen up to the amount of the levy for three weeks. You can challenge a levy, but be aware that if you fail, the money will be given to the IRS. If they cannot get funds through a bank account, it will garnish your wages, seize your home, or other possessions. At this point, you will not be getting any of the taken money back.
If you have received collection notices do not wait till it gets this far. If you have already waited and are in lien or levy status you need professional tax help now. We strongly advise you to contact us for tax relief. We are the Babbitt Tax Law firm of Naples and Fort Myers, Florida. www.Babbitttaxlaw.com. 239-300-9492.