When you owe the IRS, there are several ways the IRS can forcibly take your money and assets.
The IRS has three common Collection Actions that it uses when taxpayers have been ignoring their letters about their tax debt. Their goal is to get the taxpayer to pay their tax debt in full or enter one of their three Tax Resolution Programs (Installment Agreement, Offer in Compromise and Currently Not Collectible).
Tax Liens make a legal claim against taxpayer property to secure payment of a tax debt. Wage Garnishments and Bank Levies make a legal seizure of taxpayer property to satisfy the tax debt. After the IRS has legal authority, which is given to them through their series of letters, there is no way to predict when the IRS will use the legal seizure Collection Actions or which one they will use first.
Wage Garnishment
A Wage Garnishment is a legal seizure of a portion of the taxpayer’s paycheck. This occurs when the taxpayer has ignored the IRS and has made no attempt in resolving their tax debt by entering one of their Tax Resolution Programs. The IRS will send a notice to the employer who is required by law to withhold and remit wages from the taxpayer’s paycheck for payment of the tax debt. This can be extremely damaging to a taxpayer living paycheck to paycheck. A Wage Garnishment is usually not removed until the taxpayer has entered one of the Tax Resolution Programs.
It is VERY IMPORTANT to address a Wage Garnishments immediately! DO NOT IGNORE CERTIFIED LETTERS FROM THE IRS! These letters give the IRS the authorization for a Wage Garnishment. It is much easier to stop a Wage Garnishment before it starts than it is to remove it once it has started. GPS Tax Services has experience working with the IRS on Wage Garnishments and are committed to doing everything possible to protect your paycheck.
Bank Levy
A Bank Levy is a legal seizure of a portion of the taxpayer’s bank accounts. This occurs when the taxpayer has ignored the IRS and has made no attempt in resolving their tax debt by entering one of their Tax Resolution Programs. The IRS will send a notice to the banks and the banks will freeze the amount that the IRS has requested. The taxpayer and their representatives then have 21 days to contest the bank levy and negotiate for a full or partial release of the funds. After 21 days, the bank is legally required to remit the funds to the IRS.
It is VERY IMPORTANT to address a Bank Levy immediately! DO NOT IGNORE CERTIFIED LETTERS FROM THE IRS! These letters give the IRS the authorization for a Bank Levy. It is much easier to stop a Bank Levy before it starts than it is to reverse it. If your bank accounts are levied on the wrong day, it could be devastating as outstanding checks will be returned for Insufficient Funds. GPS Tax Services has experience working with the IRS on Bank Levies and are committed to doing everything possible to protect your bank accounts.
Tax Lien
A Tax Lien is the government’s legal claim against a taxpayer’s property when the taxpayer neglects or fails to pay a tax debt. The tax lien protects the government’s interest in a taxpayer’s property, including real estate, personal property and financial assets. A tax lien can harm a taxpayer’s credit report and credit score. Once the tax lien arises, the IRS generally will not release the tax lien until the tax, penalty and interest is paid in full or until the IRS may no longer collect the tax.
Many taxpayers do not fear tax liens thinking they only affect them if they are trying to sell the property that the lien is filed against. But some taxpayers cannot afford to have tax liens filed as they can lose government licenses or business with government agencies. A tax lien could also put a taxpayer’s job at risk (eg Financial Advisors, Stock Traders and taxpayers requiring a Federal Secret Clearance).
We can help protect your money and bank account from aggressive IRS collection activity. To find out how we can help you, please contact us.