When your property is confiscated to fulfill a tax debt you owe, the action is called a levy. The seizure of property for that reason is a lawful action. A levy of this nature is not a lien. A claim for the purpose of providing security for a tax debt is a lien. It is a levy that is responsible for taking the property to pay the tax debt. Uncle Sam has the power to take your property and sell any kind of personal or real property you own or have a stake in, if you refrain from settling tax debt or contacting the IRS to make other arrangements to pay. The IRS may:
- Confiscate and sell assets such as your house, car and/or boat
- Levy property held by another person but owned by you e.g. cash loan value of your life insurance, commissions, wages, rental income, retirement accounts, bank accounts, accounts receivable and licenses.
The IRS can levy if three requirements exist:
- A Notice and Demand for Payment is sent and your tax is evaluated
- You did not pay tax or declined to pay tax
- You were sent a Final Notice of Intent to Levy and Notice of Your Right to a Hearing also called a Levy Notice. This must take place thirty days prior to the levy. You may also be handed the notice personally, notice may be left at your place of business or home, or it may be sent registered or certified to your latest known address. A replacement receipt is necessary.
An IRS official may assess your situation or a Collection Due Process hearing in conjunction with the Office of Appeals at your request. A Collection Due Process hearing is filed with the IRS that is given on your notification. The following may be conversed:
- You paid up prior to the sending of the levy notice
- The IRS reviewed the tax and sent the levy of notice during bankruptcy
- The IRS erred in the procedure of their assessment
- The Statute of Limitations terminated prior to the sending of the levy notice
- No chance for you to argue the evaluated liability
- You want to talk about collection choices or
- You want to present a spousal defense
At the end of a hearing the Office of Appeals delivers a resolution.
