IRS Liens Levies Garnishments

Experienced San Diego Tax Lawyers

If you owe the IRS money and have not been able to work out a payment arrangement, the three (3) primary collection tools of the IRS are liens, levies, and garnishments. Each is a severe form of collection tactic, which can disrupt your business and bring your personal finances to a standstill. What is the difference between a lien, a levy, and a garnishment? How can an experienced San Diego tax lawyer help with these situations?

IRS Tax Liens

An IRS tax lien is a claim of ownership against an asset or the property of a taxpayer who owes the U.S. Treasury for an unpaid tax debt. The lien secures the interest of the IRS against the property until the taxpayer successfully completes repayment of the debt. When the lien is secured by real property, the first proceeds of the property sale are used to retire the IRS lien. If the taxpayer does not make arrangements to repay the debt, the IRS has the option to levy the property.

IRS Levy

An IRS levy is the seizure of your property to pay a tax debt to the IRS. The IRS will seize and sell your house, car, boat, collection, and any other asset that can be sold to retire your debt. An IRS levy against your bank account gives them the right to take all the money in your account, and this applies to other sources of value including retirement accounts, dividends, commissions, licenses, accounts receivable, rental income, and even the cash value of your life insurance policy. If a single paycheck is not enough to satisfy the debt, the levy against your wages is known as a garnishment.

IRS Garnishment

Garnishment is a levy against your wages that withholds a percentage of your income until the tax debt is retired. IRS garnishments are not limited to the amounts established by federal and state laws relating to normal creditors, and the IRS can garnish most of your check, leaving you little to live on.

Final Notice of Intent to Levy and a Notice of Your Right to a Hearing

Before the IRS can levy or garnish your property, accounts, or wages, they are required to send you a “Final Notice of Intent to Levy” and a separate “Notice of Your Right to a Hearing (Levy Notice).” The Final Notice of Intent to Levy is usually given 30 days before the levy occurs. It is often delivered in person, but it can be sent to your home, your place of business, or your last known address. The Notice of Your Right to a Hearing does not provide an opportunity to dispute the tax that is due. That opportunity has passed. The purpose of the hearing is to determine the severity of the impact on your finances, and if it will cause immediate financial hardship.

Contact an Experienced Tax Attorney the Moment You Receive a Final Notice of Intent to Levy or an IRS Lien Notice

Janathan L. Allen is an experienced tax attorney who will work to develop an alternative solution to the levy or lien, and help to keep your options open. There are legitimate scenarios when the lien or levy can be challenged, but these cases are usually about limiting the extent of the hardship the levy will cause.

The key to avoiding these draconian collection efforts is to challenge the IRS at an earlier point (such as during an audit), or when they are in the process of attempting to collect the tax debt. If you have been contacted by the IRS for any reason, or if you have received a Final Notice of Intent to Levy, we invite you to contact us immediately for a free consultation at 866-631-3470 or schedule an appointment to visit our office in person.