Every year, three in four Americans look forward to receiving tax refunds. These often total thousands of dollars. While this should not be thought of as free money, many recipients depend on this lump sum to cover everything from credit card debt to medical bills.
Given the importance the annual tax refund plays in so many Americans’ financial planning, any hint of it being rescinded is likely to cause panic. Such is the case as taxpayers receive the dreaded Notice of Intent to Levy. What is this and how could it impact your refund? Keep reading to find out.
What You Need to Know about the Notice of Intent to Levy
As official communication from the IRS, the Notice of Intent to Levy warns recipients that they will see their tax refund seized if they neglect to pay the amount the letter claims is due. The refund will be applied to the balance owed but may not necessarily cover the full debt.
Why Refund Confiscation Threats Are Different in 2020
The strategy of threatening to confiscate refunds is far from new. In 2020, however, levy-style warnings often arrive after recipients have taken obvious steps to fix their tax situation.
Many of those who recently received the notice of intent to levy already sent the IRS paper checks. Others completed official requests for first-time penalty abatements. Due to the agency’s backlog, however, these documents often go unprocessed until after taxpayers’ refunds have been called into question.
There is no clear path forward at this point. IRS spokesperson Eric Smith advises those dealing with this unprecedented situation to “call the toll-free number on their levy or other notices for assistance.” If anything is clear, however, it’s that taxpayers who are desperate for their refund will need proactive and assertive intervention.
If you’ve received the Notice of Intent to Levy from the IRS, it is crucial that you take action. Going it alone is risky in 2020, but you have a fighting chance if you work with a tax resolution service. Contact the Highland Tax Group today to get started.