Operating a business can often feel like a juggling act, especially when managing the flow of revenues and payments. And even if you are working as hard as you can with the best of intentions, it’s possible to fall behind on one of the most critical liabilities: The tax payments you owe to the IRS. Now, the situation has become dire—the IRS has issued a Notice of Federal Levy to seize property or equipment essential to conducting your business.
What Led Up to the Levy?
Initially, the IRS sends an IRS Notice and Demand for Payment based on their assessment of the taxes you owe. If you fail to respond, they send up to four additional notices, followed by a Notice of Federal Tax Lien; a lien is a claim against your property, which can damage your credit. If you still do not pay your tax debt, the IRS sends you a Final Notice of Intent to Levy and a Notice of Right to a Hearing at least thirty days before issuing a levy. The exact timing and number of notices will vary depending on the individual case.
Responding to a Levy Notice
First, responding promptly and clearly about your intent to resolve the issue is essential. If you are unable to pay the tax debt in full immediately, options include asking that an IRS manager review the case or requesting a hearing; here are examples of what may occur in either case:
- You negotiate an installment agreement for the payments.
- You show evidence that releasing the levy will help the IRS collect the tax.
- You show that the levy creates significant economic hardship.
- The IRS grants you an extension to pay your tax debt.
- You settle your tax debt for less than the amount you owe.
If you have received a levy notice and you need guidance, the experienced tax professionals at the Highland Tax Group can advise you on the steps to take to protect your business and manage your tax debt.