When the IRS takes collection actions, one of the most severe steps they can take is an IRS levy. If you’re facing an IRS levy, it’s crucial to understand what it is and how you can prevent it from damaging your finances.

What is an IRS Levy?

An IRS levy is a legal seizure of your assets by the IRS to satisfy an unpaid tax debt. The IRS uses levies to collect money when other attempts to collect the debt—like sending notices—have been unsuccessful. If you owe back taxes, the IRS can levy:

• Wages: They can garnish your paycheck.
• Bank Accounts: The IRS can freeze and take money directly from your bank account.
• Property: In some cases, physical property like cars, homes, and other assets may be seized to satisfy the debt.

How Does an IRS Levy Happen?

Before the IRS can levy your assets, they must follow a strict process:

1. Multiple Notices: The IRS will first send a series of notices about your tax debt. These include the CP501, CP1058, and other related letters.
2. Final Notice of Intent to Levy: This letter, which is usually a CP90 or CP91, informs you of the impending levy.
3. Levy Actions: If you don’t resolve your debt after receiving these notices, the IRS can move forward with a levy.

How to Prevent an IRS Levy

The best way to avoid a levy is to take action as soon as you become aware of your tax debt. Here’s what you can do:

• Respond to IRS Notices: Don’t ignore any letters or warnings from the IRS. Always respond within the time frame provided.
• Set Up a Payment Plan: If you can’t pay your tax debt in full, setting up an installment agreement can prevent a levy.
• File for an Offer in Compromise: If you qualify, an Offer in Compromise allows you to settle your debt for less than you owe.
• Request a Delay: If you’re experiencing financial hardship, the IRS may agree to temporarily suspend collection efforts.

How Fine & Clear Tax Solutions Can Help

At Fine & Clear Tax Solutions, we specialize in helping individuals and businesses navigate IRS collections, including the threat of levies. Our team can assist you in responding to IRS notices, negotiating payment plans, and exploring options like Offer in Compromise to reduce your debt.

Don’t let an IRS levy impact your financial future. Call us today at (516) 209-2594 for a free consultation. Let us help you find the best solution to your tax problems.