Today’s IRS is aggressive and unrelenting. After legislation passed in 1998, the IRS spends dramatically more money to assess and collect taxes. Along with more collection officers in the field, the IRS has increased its efficiency and effectiveness at enforcing collection through new technology and software.
Between 2000 and 2009, IRS seizures and levies grew from 219,000 to 3.4 million!
The IRS can take your paycheck, bank account, securities, accounts receivable, indeed, anything you own including inventory, automobiles, boats, and real estate. When seizing your property from another person, company, or bank, the IRS uses the term “levy.” When taking it from you directly, the IRS uses the term “seizure.”
When seizing directly, the IRS gives you a Notice of Intent to Levy and arranges to take the property, preserving your privacy. That’s not the case when the IRS levies on your paycheck or bank account. The IRS sends a notice of levy to your employer and your bank. Too often employers take a negative view of an employee because of his or her tax problems. Although it’s not permitted by law, the employer may send the employee looking for a new job.
A levy on your bank account or 401k takes everything you’ve saved. A levy on your paycheck leaves you with a minimum amount to pay your living expenses. Although each person’s situation is different, a single taxpayer could be left with less than $800 a month to live on. A family of four could be left with as little as $1,700 a month for expenses.
Levies on business property – inventory, cars, trucks, accounts receivable – cripple and destroy a company. When the IRS delivers a levy notice to a supplier or client, often that means the end of the taxpayer’s business. Suppliers are afraid to extend credit and cut off inventory. Clients lose faith that the business has a future and bolt to the competition.
The best strategy is to prevent seizures and levies before they occur rather than undo the damage later on.
If you have received a Notice of Intent to Levy, speak with the tax attorneys at STS Tax Law by calling 1-800-TAX(829)-6183 or fill out our simple Contact Form.
Learn more about solutions to back tax debt.