What Is A Tax Levy?
When it comes to taxes, it is one of the essential things to pay to the government as a respectful citizen. And when these taxes are not paid, the government has to take some legal actions and a tax levy is one of them. Tax levies make you feel helpless about the assets and money you earned from hard work and you can’t say a word to the government because a tax levy is charged for your own mistake of not paying taxes on time.
In spite of this terrible feeling, the good news is there are still ways you can get your life back to normal so you need to consult an income tax solution company that will look at your previous tax records and will find ways to take you out of this terrible situation.
BottomLine-Tax provided the best tax preparation service in New York as we are known as an experienced income tax firm.
Before resolving these tax issues, it is important to know what is a tax levy and how it can affect your hard-earned assets.
What Is A Tax Levy?
As a simple process, taxes are applicable to every citizen by the government. But when you don’t pay taxes then the IRS and the local government collect those taxes from the money or assets you owe with the allegation called Tax Levy.
In tax levies when the taxes are not paid, the government tries to get the money from your monthly income by taking it directly from your bank accounts or by seizing and selling the property you owe.
Government can seize your assets for the sake of a tax levy. Those assets include:
- Bank accounts
- Insurance policy
- Investment accounts
- Physical assets.
Now have you ever wondered why the government would apply a tax levy on you?
This is because the tax liens remained unsolved which resulted in a tax levy.
Let’s understand what a tax lien is.
Tax liens are claims against your property and assets. There is a claim against you that is securing your debt to the creditor.
The IRS sends you an official letter asking you to pay the taxes you owe. If you fail to pay those taxes then the tax lien claim will begin. The failure will let the IRS initiate a tax levy. In simple words, a tax lien is a warning to the taxpayer that if they will not pay, then they will surely face a tax levy. In the case of a tax levy, the government will start seizing your property and assets in order to pay the outstanding tax debt.
Income tax solution companies are the only way you can get over the tax levy or at least they can help you in reducing the cost the government is asking for.
Types Of Tax Levy
It is in the hands of the IRS to select any method to imply the tax levy depending on the situation of the taxpayer to recoup the due money.
Here are some types of tax levies a taxpayer could face:
If you are an employee, the IRS will contact your employer and will ask them to hold a certain amount of money from your wage. This process is called wage garnishment and it is one of the common methods to fulfill tax levies.
The wage garnishment will remain the same until the due taxes are fully collected to satisfy the debt.
In the case of the bank levy, the IRS will send a letter to the taxpayer’s bank and will request them to hold the withdrawals for 21 days. After 21 days the bank will start to deduct the amount as asked by the IRS and will forward it to them. If the taxpayer’s bank does not carry enough money then the bank will repeat the process again until the debts are paid.
This is one of the most difficult and the biggest tax levy a taxpayer will bear is the property seizure. In this tax levy, the IRS will seize your physical properties like houses, cars, boats, etc.
These properties will be sold one by one to fulfill all the debts. Property seizure levies are rarely used and are usually withheld only in the most serious cases.
How Can You Stop A Tax Levy?
Paying taxes in full and on schedule is the best strategy to stop a tax levy. In the event that this is not feasible, a taxpayer may work out an installment agreement with the IRS or attempt to reach a settlement.
The taxpayer has the right to file an appeal and stop the IRS from continuing forward with a tax levy if it has already been started. Financial difficulty or being an innocent spouse are a few of the circumstances that may warrant being spared from a tax levy.
BottomLineTax – Tax Preparation Services In New York
BottomLine-Tax being your tax compliance in New York will not only help you in paying your taxes legally and on time, but we will also help you in handling difficult situations like Tax levies.
Trust BottomLine-Tax in your taxation because we provide the best tax preparation services in New York for all respected taxpayers.