Post by myTax Solutions on Mar 9, 2016 9:27:29 GMT
-Understanding the Difference Between a Lien and a Levy
It is important to know that a lien is not a levy. Whereas a lien secures the government’s interest in property, a levy attaches to a liquid asset – your money. The IRS will issue levies on bank accounts, personal wages, Social Security benefits, and business accounts/note receivable, or personal property (seizure).
One thing is definite – the IRS is very predictable. It has to be as this is the law. They will always provide proper notice prior to issuing a levy on any of the aforementioned property. If you have allowed it to get to the point of levy action, you must understand why it got to that point and what is needed to undo the harm that the levy has created. The first step is to contact the IRS and determine why the levy was issued. This is generally because there is a compliance issue, a previous agreement has entered a default status, or you have not addressed the problem with the IRS.
The next step is to understand your rights as a taxpayer. When a levy is issued on bank accounts or A/R, the receiving party must hold the funds that are due to you for a period of 21 days. If the issue is not resolved in that amount of time then the money must be sent to the IRS. During this 21-day time period you must work directly with the IRS to enter into agreement or, at the very least, show a definitive hardship based on the levy action. If this is not done, the IRS will not release the levy.
Once the levy has been addressed, the next step is to solidify your plan as a taxpayer to maintain compliance and continue with the agreement that has been set forth.
It is important to know that a lien is not a levy. Whereas a lien secures the government’s interest in property, a levy attaches to a liquid asset – your money. The IRS will issue levies on bank accounts, personal wages, Social Security benefits, and business accounts/note receivable, or personal property (seizure).
One thing is definite – the IRS is very predictable. It has to be as this is the law. They will always provide proper notice prior to issuing a levy on any of the aforementioned property. If you have allowed it to get to the point of levy action, you must understand why it got to that point and what is needed to undo the harm that the levy has created. The first step is to contact the IRS and determine why the levy was issued. This is generally because there is a compliance issue, a previous agreement has entered a default status, or you have not addressed the problem with the IRS.
The next step is to understand your rights as a taxpayer. When a levy is issued on bank accounts or A/R, the receiving party must hold the funds that are due to you for a period of 21 days. If the issue is not resolved in that amount of time then the money must be sent to the IRS. During this 21-day time period you must work directly with the IRS to enter into agreement or, at the very least, show a definitive hardship based on the levy action. If this is not done, the IRS will not release the levy.
Once the levy has been addressed, the next step is to solidify your plan as a taxpayer to maintain compliance and continue with the agreement that has been set forth.