If you owe the IRS but do not pay your tax liability in full, the IRS will send you a tax bill demanding payment in full. If you do not pay in full or make other payment arrangements, the IRS will pursue collection of the taxes through liens, levies, or garnishments.
I. Tax liens
A tax lien establishes the government’s right to seize your assets and use the proceeds to pay your tax liability. The filing of a tax lien can be quite burdensome. Third parties dealing with your property may find their positions subordinated to the position of the IRS. Moreover, the filing of a tax lien will be reported to credit agencies and may adversely affect your credit.
If the IRS places a lien on your property, they must send you a notice of the lien within five days of the lien being filed. If you want to appeal the placement of the lien, you must request a collection due process hearing with the Office of Appeals within thirty days after the fifth day the lien was filed. If you fail to request a CDP hearing within the thirty-day period, you forfeit your right to the hearing. However, you may obtain an equivalent hearing but your right to appeal an adverse ruling will be lost.
A. Avoiding liens
The Internal Revenue Code and the IRS’s own procedures give properly informed taxpayers the opportunity to prevent the filing of tax lien notices, but you must be proactive and work with the IRS in a timely and effective manner. Failure to do so will result in the filing of tax lien notices in the public record, after which it is very difficult to get the lien removed.
B. Removing liens
After a lien has been filed, it is very important to have the lien released, or to have certain assets removed from the attachment of the lien, so that property can be sold or refinanced, or so that the taxpayer can obtain a new loan to resolve his tax problems. In these cases, the IRS can issue several kinds of “certificates” with respect to previously filed liens.
If you owe taxes and have been notified that a lien will be or has been filed against you, it is time to take action. The law firm of DeBlis & DeBlis can help.
II. Tax Levies
A levy is often the IRS’s way of getting your attention. A tax levy is the actual seizure of your wages or commissions (often called a garnishment) or whatever other assets the IRS can find to pay off your tax debt. This may include bank accounts, IRAs, automobiles, stocks, and bonds – anything that isn’t nailed down, and some things that are (like your house).
You have only 30 days from the date of a final notice of intent to levy to either pay the tax in full or find another answer. Ignoring the notice will only make matters worse. Once the 30 days has passed, the IRS does not have to give any further notice before seizing your assets or wages.
Once we are brought into the case, we will work diligently to secure a temporary freeze on levies and other collection activity so that we will have sufficient time to analyze your situation and determine the best course of action.