The Truth About Liens & Levies

The Truth About Tax Liens & Levies

When you owe money to the IRS the IRS has two very effective ways to collect the taxes they are owed, the federal tax lien and the levy.

The Federal Tax Lien – An Encumbrance
When the IRS assesses a tax liability against a taxpayer they are required to give notice to the taxpayer and demand for payment within 60 days of the assessment. If the full payment is not made then a tax lien is thereby created and subsequently encumbers all property and property rights of the taxpayer. This encumbrance applies to all current property and current property rights as well as any and all property and property rights acquired in the future by the taxpayer until the tax is paid in full.

The Levy – A Seizure
A levy is a seizure of your property, In order for the IRS to gain possession of your property thru a levy the following must take place:
1) The IRS must make a notice and demand for payment.
2) The taxpayer must neglect or refuse to pay the tax within 10 days of the notice and demand.
3) The IRS give the person a notice in writing of his or her right to a hearing 30 days before the levy is made on the taxpayer’s property.

Unless the taxpayer asks for a hearing, the IRS may levy upon all property and rights to property belonging to the taxpayer with the exception of certain exemptions. Do you have a federal tax lien or levy? Make sure you user a professional tax resolution company in order to learn what your best options are in dealing with this problem.