If you owe money to the IRS but haven’t paid, the agency can file a tax lien, a tax levy, and take seizure action against you. The lien will likely include interest, and the government can attach nearly all of your assets. However, you can take proactive measures to stop property seizure. Here’s how.
Federal Tax Lien Notice
If you do not pay your tax bill after notification from the IRS, the agency can file a notice of public record that shows your tax debt. The IRS will submit a Notice of Federal Tax Lien, even if you don’t own property, since you could own property in the future, and it will claim proceeds related to future financing or sales. If someone pulls your credit report or looks at public records, he or she will find the Notice of Federal Tax Lien along with your tax information.
In addition, credit reporting agencies include tax liens on your credit report. The lien negatively impacts your credit, hurting your opportunities to secure home loans or finance vehicles or other purchases.
Federal Tax Levy
Once you fail to pay the lien, the IRS can then seize your property to satisfy the tax debt, also called a Notice of Levy. The agency can seize your personal assets, such as property, cars and recreational vehicles, along with other property, including earnings, savings or checking accounts, rental income or retirement accounts.
How to Stop a Tax Levy
Once the IRS places the levy against your property, income or earnings, the process will only stop in one of the following ways:
- Payment of the entire tax obligation
- Expiration of the statute of limitations or
- A release of the levy.
If the IRS levies your bank account, the bank will freeze your account for 21 days and then send the amount due to the IRS to pay the tax debt.
A Tax Levy against Your Property
In the event of a tax levy against your residence or business, the IRS officer will first confiscate assets in public areas. The agent will ask to enter private areas and next take assets there as well. If you refuse to grant the IRS permission to enter, the agency will pursue a Writ of Entry – which is somewhat like a search warrant – that allows the IRS to take property in an effort to resolve the tax obligation.
Legal Protection Against Property Seizure
If the IRS threatens property seizure, you might not know what steps to take. That’s where an experienced professional with a strong background in tax resolution in Denver can help. To find out more about your rights in fighting the IRS, contact us at 720-398-6088 for assistance ASAP.