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You’ve received a Final Notice of Intent to Levy. You owe the IRS and Virginia, you’ve ignored their requests for payment, and now it’s getting serious. What does it mean? Where do you turn?
A tax levy is not the same as a tax lien. Both are four letter words. Both start with “L”. But a levy is much more serious.
A tax lien is a notice to the world that an individual or a business owes the IRS. But no money or property is taken by filing a federal tax lien.
On the other hand, through a tax levy the IRS or state of Virginia collects on your tax debt by seizing your real or personal property
While you may receive the Final Notice of Intent to Levy, it’s usually your bank or employer who receives the actual levy. The property you own—wholly, partially, or jointly with others—may be seized and sold to satisfy your debt to the IRS.
Retirement plans and homes are generally off limits to IRS seizure, as are vehicles needed for work. Most other assets, however, including bank accounts and a portion of your paychecks, can be subject to seizure.
A tax lien can be the kiss of death to your credit rating—which is bad.
A tax levy takes money right out of your bank account—which is worse.
The IRS usually files a lien before they initiate the levy process, but they don’t have to. They file about 100 times more liens each year than seize property through the levy process.
ANCHOR ON THIS —> If need tax levy help, and have received a Final Notice of Intent to Levy, contact Anchor Tax Relief today. We’re IRS and Virginia Tax Problem Experts. We deal with the IRS and the Virginia Department of Taxation on a daily basis, obtain relief from liens and levies, and solve your tax problem, permanently.
For some, a recorded tax lien is just one more black mark on their credit report—which was likely already a mess anyway. It’s not a levy notice. That said, how do you fix an IRS Virginia tax lien? You have three options:
Appeal the lien filing by contacting the IRS Appeals Office. It’s not likely you’ll win, but if you do, the lien will
be withdrawn. Unfortunately, the fact of the lien filing will not be removed from your credit report.
Pay in full, even if it means borrowing from friends or family. It’s better to owe just about anyone than the IRS, not to mention just about anyone’s interest rates will be lower.
Request a partial discharge. Perhaps you own several assets that have been encumbered by the lien. If you want to sell one to pay off your IRS debt, ask for a discharge on that asset. The IRS will likely agree; bottom line, they want their money and a partial discharge can open the door to resolving the debt.
Note that bankruptcy isn’t included in the list of options to settle the tax lien. Your personal liability may be cleared by the bankruptcy, however, the tax lien will remain. (See a bankruptcy attorney for a professional analysis and advice for your specific situation.)
Whenever you owe Uncle Sam and don’t pay, a claim against you by the US Treasury arises by law. This claim is called a tax lien. The lien automatically attaches to pretty much everything you own or have a right to—your home, your bank account, your paychecks.
The initial IRS notice is not public infomration; for this reason it’s called a ‘secret’ or ‘statutory’ lien. If you don’t pay within 30 days, however, thet IRS has a right to file a notice in the public records showing your tax debt. The federal government issues over ½ million notices each year. It’s officially called a Notice of Federal Tax Lien, and will be recorded in the city or county courthouse where you work, live, or own real estate.
Just as a recorded mortgage tells anyone who searches the public records or pulls a credit report that you owe the mortgage company, a Notice of Federal Tax Lien tells the world you owe the IRS. It damages your credit rating, scares off potential creditors, and makes it difficult to finance future purchases.
Taxpayers looking for tax relief help aren’t sure what to expect when hiring a professional to fix their back tax issues. Their two main questions are:
(1.) Can you settle my tax problem for less than I owe?
(2.) How long will the process take?
Upon retaining our firm to resolve your tax matter, some relief will be immediate, and some will take effect over time. Keep in mind that your IRS problem didn’t develop overnight. It will take some time to resolve. The good news is that we start working on your behalf immediately, so that you won’t have to meet or speak with the IRS again.
An properly structured Installment Agreement will typically take anywhere from 2 months to 6 months to work out with the IRS. An Offer In Compromise will generally take 6 to 12 months. (Your mileage may vary; these are typical time ranges.)
ROAD MAP TO RESOLUTION
Determining whether you can qualify for an Offer in Compromise (to settle for less than you owe) depends on the circumstances of your case. How much you owe, how much you earn, what assets you own, your future income potential — all of these factor into assessing which IRS “Fresh Start” program is best suited to your tax matter.
That’s why the first step in the process is a free consult. It may be in-person meeting, or it may be a simple phone consult. Either way, this is when an experienced tax resolution professional (Enrolled Agent, CPA or Attorney) will evaluate your situation, let you know your rights, and present options for resolving your matter. Be sure to provide all recent IRS notices so we have all the info necessary to make an informed assessment.
RETAINING A PROFESSIONAL
If you decide you’d like to move forward with professional representation, and we agree to take on your case, you will be required to sign an Engagement Letter outlining the work to be done and the financial arrangements to pay for our services. A Power of Attorney (POA) is then filed with the IRS, which will provide you with immediate relief, because from this point on the IRS will be required to contact us instead of you.
If an IRS agent should happen to contact you, all you need to do is politely request that they contact us directly and provide them with our contact information including phone number. A separate POA will be required for resolving a State tax problem.
For further info on what to expect, and what the next steps are on the road to resolution of your tax matter, please email or contact us by telephone today.